Retail sales decelerated from 9.2% year-on-year to 4.6%, strongly below the market consensus (7.9% YoY). Surprisingly, a sharp deceleration occurred in food and megastores sales (respectively -10.4% YoY and -1.4% YoY), likely reflecting a negative base effect after an earlier Easter (which was stronger than the historical trend). The Sunday retail trade ban, which took effect 11 March, probably had a minor effect.
Categories related to durable goods i.e. sales of motor vehicles and household appliances, continued to decelerate, suppressed by base effects (see the chart below), while sales of semi-durable goods increased.
Retail sales volume in selected categories (%YoY, 3-ma)
Poland's official statistics office GUS has also published data on the investment of enterprises employing more than 50 workers in 1Q18. Growth in this category was 6.6% YoY and likely underperformed overall investments (we expect 12% YoY – 1Q18 GDP structure will be published next week). GUS highlighted a major contribution from the transportation sector (86.8% YoY), which could be related to national railways (also supported by EU funds). Retail trade also posted a strong 31.9% YoY increase (possibly due to automation amid a labour shortage). A strong negative drag came from the energy sector (-28.3%YoY).
ING forecast for 2Q18
The overall picture remains consistent with GDP deceleration in 2Q18 (we expect a slide from 5.1% YoY to 4.6% YoY). Private consumption should reflect the downward trend visible in retail sales and slow from an estimated 5.1% YoY in 1Q18 to 4.3% YoY. Double-digit investment growth is also unlikely in 2Q18.