bne IntelliNews – Polish Retail Sales Double Year-on-Year Expansion Rate in April
Polish retail sales rose 19% year-on-year at constant prices in April, with the growth rate nearly doubling from a 9.6% year-on-year gain the previous month, statistics office GUS said. May 23.
The weak April 2021 base effect, Easter spending and Ukrainian war refugees drove the April jump, analysts said. Meanwhile, seasonally-adjusted m/m retail sales fell 0.8% for the first time since December, a harbinger of a slowdown in consumer spending after the jolt from the influx of refugees motivated by war, but also because of the inflation that has eaten into household incomes.
“We expect that in the coming months, household spending on goods will grow at a slower pace year over year, due to very high inflation, the decline in the real value of savings and rising interest rates that will limit the possibility of credit financing,” the Bank said. Millennium said in a comment on the GUS numbers.
However, the month of April alone marks the good start of the economy in the second quarter. The consensus remains for full-year economic growth to be well above 4% even if a more pronounced slowdown materializes in May and June.
Seven of the eight major retail segments posted year-over-year revenue gains at constant prices in April, GUS showed in the data breakdown.
Among key segments, sales of textiles, apparel and footwear grew the fastest, reaching 121.4% year-on-year in the fourth month, likely driven by spending by refugees for the most part as they tried to settle in their country of temporary origin.
Fuels sales increased 11% year-on-year, while pharmaceutical segment revenue increased 18.9% year-on-year.
Food sales rose 11.9% year-on-year – another effect of the influx of refugees but also Easter spending. Sales of furniture, audio and video equipment and home appliances rose 27.9% for the year.
Car and auto parts sales were the only retail segment to contract, down 11.2% year-on-year.
At current prices, retail trade turnover increased by 33.4% over one year (+22% in March) and by 2.1% m/m in April. At constant prices, sales fell 0.1% m/m unadjusted, according to GUS data.
Retail sales and other high-frequency data do not change much in the outlook for interest rates in Poland. The National Bank of Poland (NBP) is almost certain to hike again in June, with the market expecting a hike of at least 75 bps to take the benchmark rate to 6%.
Further tightening is still very likely in the coming months, as inflation is expected to persist in double digits, peaking at 15% or even 20%, according to analysts.