A fall in retail sales in Hungary in March reflects a drop in real wages and a lack of improvement on the labor market. The decline suggests household consumption will pick up only from next year, analysts said on Tuesday.
Retail sales fell 0.9% year-on-year in March, the Central Statistics Office (KSH) said. The decline came after sales edged up 0.1% in both January and February. In a month-on-month comparison, retail sales dipped 0.5% after stagnating in February and rising 0.6% in January.
Takarékbank’s Gergely Suppan said the drop in retail sales shows a fall in real wages. Higher food and fuel prices may have also held back sales.
Retail sales could pick up in the coming months, mainly because of the base effect, to bring full-year growth to 0.5%, he said. Domestic demand could be helped as inflation is expected to slow to around the 3% central bank “price stability” target by the second half of next year, he added.
György Barta of CIB Bank said personal income tax changes in effect from the start of the year had not yet resulted in an improvement in household consumption, but payouts of real yields on pension assets transferred to the state pension pillar could boost demand at the end of the summer.
He put retail sales growth for the full year at 1-2%, after a contraction of more than 2% in 2010. Genuine growth is likely to be seen only from the 2012, he added.
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