Retail sales in Hungary are down for the third month in a row. This is according to the latest report of the Central Statistical Office (KSH). On an annual basis, the volume of retail trade increased by 4.5% in June.
Compared to May, the volume fell by 0.5%. After the May figure was also revised downwards by the statistics office, this means that retail trade has been declining for the third month, which means a meaningful decline and a downward trend in consumption, Péter Virovácz, senior analyst at ING, said analyzing the data.
The business news site hvg.hu also quotes János Nagy, macro-analyst at Erste, who pointed out that the 4.5% annual growth is significantly below analysts' expectations of 8%.
However, the rise in prices is also having an impact on annual figures in some areas, with the volume of goods sold in food and grocery stores falling by 0.3% on an annual basis. This is important because this area accounts for almost half of all sales. The only time we have seen a fall in grocery sales volumes in recent years has been during the COVID-19 closures (for example, after the panic buying in March 2020), the news site notes.
Non-food retailing is still holding its own on an annual basis – KSH recorded a 2.5% increase – but on a monthly basis, the decline has been several percentage points for the third month in a row, with volumes falling 3.6% in June, similar to May. "It is therefore becoming increasingly clear that the massive expansion in consumption seen at the beginning of the year, driven by government transfers, has been replaced by a more serious rebound," Virovácz writes, adding that the fact that furniture and hardware stores and industrial goods shops saw an annualized decline of around 3-4% in June also points to a slowdown in higher spending by the population.
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