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Hungary retail sales still slump in May

Although the decline in Hungary’s retail sales slowed down in May, its extent is below analysts’ expectations. Retail sales in Hungary continued to fall for the third consecutive month in May, and year-on-year decline was 4.7%, although analysts have earlier predicted only 3.8% yearly fallback.

Annual sales fell 4.7% from a year earlier after a 5% drop in April. The median estimate of six economists in a Bloomberg survey was 3.8%.

Fresh data from the Central Statistical Office (KSH) shows that in May, sales volume dropped a seasonally and calendar-adjusted 0.5% month-on-month, compared to 0.8% in April. Retail trade in food, beverages and tobacco remained flat on a monthly basis after recording a 0.9% drop in the previous month.
Sales of food, beverages and tobacco in non-specialized stores increased 0.2% monthly, while there was a 0.5% drop in its sales in specialized stores. Retail sales of non-food products fell 1% month-on-month in May and sales of clothing and footwear recorded an increase of 0.7%.
While, sales of food beverages and tobacco in specialized stores recorded a notable increase during the month, its sales in non-specialized stores recorded an annual drop. Non-food trade continued to fall in May, albeit at a slower rate than in April.
During the first five months of the year, the sales turnover amounted to HUF 2768 billion.
Bloomberg attributed the decline to a slump in fuel consumption. According to KSH data, turnover at filling stations fell 11.7% in May and 9.8% during the first five months, from the same periods of last year.
The continued decline in retail sales came in at a time when Hungary was bracing for new economic risks. An IMF mission to Hungary returned to Washington on July 19 without concluding the review of the country's economic program. This will deny the country access to funds from an existing €20 billion aid package.
Last week, in yet another blow to the Hungarian government, rating agency Moody's placed Hungary's sovereign rating under review for possible downgrade. Elsewhere, its peer Standard & Poor's threatened to cut the country's rating to junk.
The Hungarian economy had registered a meager 0.1% growth in the first quarter compared to 4% decline in the previous quarter.
At the same time, Poland published its retail sales figures last Friday, which was a surprise on the upside. Polish retail sales grew 6.4% on a year-on-year basis in June compared with the consensus expectation of 4.1% year-on-year. Unemployment dropped a bit in June to 11.6% from 11.9% in May. Both numbers confirm that the recovery in the Polish economy continues and that rate hikes have moved closer, the FXstreet.com wrote. (BBJ)