Retail sales edge up on yields payout, low base - analysts

Analysts attributed the slight increase in retail sales in Hungary in August to a low base and the payout of yields on private pension fund assets.

Retail sales were up 0.4%, both in a year-on-year and month-on-month comparison, in August, the Central Statistics Office (KSH) said on Friday.

Magyar Takarékszövetkezeti Bank analyst Gergely Suppan told MTI retail sales likely edged up because of the payout of real yields on private pension fund assets to former members who returned to the state pension pillar.

Worsening consumer confidence, higher repayments on foreign currency-denominated loans caused by the weakening of the forint and overall caution among households will probably counter the effect of a rise in real wages and could cause retail sales to start falling again in the coming months, he added.

Buda-Cash Brókerház analyst Gergely Tóth also put down the rise in retail sales to the payout of real yields on private pension fund assets as well as the low base.

Consumers could bring purchases forward before the main VAT rate rises from 25% to 27% at the beginning of next year, but the effect will probably be muted, he added.