Hungary: Retail sales strong again

Retail sales growth turnover has been accelerating since the low in May. The 6.4% YoY calendar adjusted rate posted in July is the third-strongest reading this year. The July performance was a positive surprise, despite consumer confidence having dropped and there having been significant take-up of the new five-year retail bond. It seems that the majority of the funding for retail bonds came from a reshuffling of portfolios, with the other part new money from still double-digit wage growth. Against this backdrop, the labour market and wage developments are strong enough to boost both savings and consumption.

The details show automotive fuel retailing was the only sector where we saw a deceleration in growth in line with the increase in oil and fuel prices. Turnover in food and non-food shops rose at a faster pace in July than in the previous month. The growth rate of non-food shops reached 9% YoY, the strongest reading since March mainly on the back of the sales of manufactured goods, furniture and electrical goods.