The volume of retail sales grew by 3.3 percent and 3.4 percent in March 2017 and in Q1 2017, respectively, in Hungary. The Ministry for National Economy expects the existing upward trend, in place for 45 months, to persist in the remainder of the year, thanks – among other factors – to job growth, the Government-initiated six-year wage agreement and low inflation.

Data adjusted for calendar effects show growth of 5.4 percent, which figure is well above the EU average of 2.5 percent.

Among sales components, the volume of sales at non-specialized food, beverages and tobacco product retailers was up by 3.7 percent, while that of non-food retailers increased by 7.6 percent year-on-year.  The latter figure was partly the result of the 10 percent sales growth at mail order services providers, which category accounts for 3.4 percent of total retail sales. Within non-food retailing, sales at textile, apparel and footwear stores increased by 12 percent, while they were up by 8.3 percent at stores selling books, computers and other household equipment. Sales at other non-specialized stores gained 14 percent year-on-year. As a whole, retail sales have risen by 20.7 percent since January 2010 and by 17.6 percent since the beginning of 2014.

Demand by households for certain services (such as tourism) has recently increased even more than retail sales. Steady sales growth in the sector augurs well for further household consumption growth, also underpinned by Government measures. The six-year wage deal is seen to fuel consumption through rising wages and VAT reductions, which in turn is predicted to contribute to GDP growth.

(Ministry for National Economy)