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Retail sales to stay flat

Retail sales in Hungary are likely to continue to stagnate in the coming months, analysts told MTI on Friday, after the Central Statistics Office (KSH) published fresh data.

Retail sales volume edged up 0.2% in February in a year-on-year comparison, KSH said in the morning. Retail sales stagnated in a month-on-month comparison.

Erste Befektetési's Zoltán Árokszállasi said the year-on-year rise was well under his own 0.7% estimate. The data show domestic demand will probably recover at a slow rate, he added.

Hungarians are taking home more because of personal income tax changes in force from the start of the year, but this extra money could be going into savings, he said. Payouts of real yields on assets of former private pension fund members could boost spending, he added.

Dávid Németh of ING Bank also said Hungarians are probably saving any extra income they are bringing home. They may hang on to the real yields on pension assets, expected to be paid out in Q3, until just before the Christmas holidays, he added.

Retail sales may pick up in a month-on-month comparison but are likely to stagnate in a year-on-year comparison in the coming months, he said.