Hungary: Fuel sales save the day

After a major disappointment in May, retail sales rebounded in June, posting year-on-year calendar adjusted growth of 5.2%. At first sight, this looks strong enough, but compared to what we’ve been used to in the past 18 months, it is definitely a sign of weaker activity. The sector’s performance in the second quarter was clearly weaker compared to the first in both the quarter-on-quarter and year-on-year comparisons. Against this backdrop, we expect consumption to slow accordingly, which should have an impact on GDP growth, too.

Coming back to the June performance, all of the three main subsectors posted an acceleration in turnover growth, so the rebound seemed to be broad-based. However, most of the good performance came from automotive fuel retailing with calendar adjusted growth of 7.4% YoY. Excluding this, total retail sales rose by 4.2% YoY, only slightly better than the worst performance of the year, which was registered in May. Non-food shops posted an 8.7% YoY increase in turnover, mainly on the back of seasonal sales of clothing (hot weather) and pharmaceutical products (mosquito invasion).