Polish retail sales grew 4.4% y/y in constant prices in August, the statistics office GUS said on September 20.
The reading marks a slowdown of 1.3pp in retail turnover growth in comparison to y/y expansion recorded in July. While below market expectations, the expansion in August is in line with Poles’ robust consumer spending that is driven by the good situation on the labour market, low unemployment and growing wages in particular.
“The small impact of the child benefit expansion on sales of items [such as electronics or household appliances] suggests household spending is focused more on services,” ING wrote in a comment to the release. The Law and Justice (PiS) government has recently expanded its flagship programme of monthly child benefit of PLN500 (€114) to encompass virtually all children in Poland. The ruling party is fighting to win the second term in power with election due on October 13.
Poland’s GDP growth came in at 5.1% y/y in 2018, the fastest expansion in over a decade. The economy also expanded unadjusted 4.5% y/y (4.2% y/y upon adjustment) in the second quarter in a show of resilience amidst the worsening of the external environment.
All but one retail segments expanded y/y sales in constant prices in August, GUS data showed. Turnover in the lump category of “other retail sales in non-specialised stores” expanded the fastest, at 12% y/y.
Sales of furniture, audio and video equipment, and domestic appliances grew 11.6% y/y. Sales of food, drinks, and tobacco products expanded 1.5% y/y. Fuels sales grew 1.3% y/y. Sales of cars, motorcycles, and their parts increased 3% on the year.
In monthly terms, retail sales only grew 0.1% in constant prices in August.
In current prices, retail sales grew 6% y/y versus an expansion of 7.4% y/y in July. In monthly terms in current prices, there was a fall of 0.4% that followed an expansion of 1.7% m/m the preceding month.
In January-August, retail sales grew 5.9% y/y in constant prices and 7.3% y/y in current prices, GUS data also showed.
"Today’s data does not change our expectations for private consumption spending. We expect an acceleration in the third quarter from 4.4% y/y to approximately 5% y/y," ING predicted.