Hungary's calendar adjusted retail sales figure was up by 6.4% Y/Y in April, up from 4.3% Y/Y in March, boosted by non-food products consumption, which increased by 10.3% Y/Y. Consumers in Hungary had been postponing buying since crisis and growing net real wages supported non-food products consumption.
The food retail sales grew by 3.9% Y/Y, which is above the year-to-date average level. The fuel consumption rose only moderately, was up by only 3.5% Y/Y in April vs. 5% Y/Y in March and 9.1% Y/Y in February. High base and the increasing fuel prices seen as the reason behind the slowdown in fuel consumption. Retail sales is now expected to be the main driver of this year’s economic growth of around 2% Y/Y.
“The continuously strong consumption is expected to push inflation gradually higher, so this figure suggests that NBH won’t cut the base interest rate (0.9%) further in June.” notes KBC Market Research in a report.
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