Actual (Feb): 1.6% y/y
Consensus: 1.0% y/y
Previous (Jan): 1.8% y/y
The growth of retail sales in February was higher than expected. Moreover, the January figure was revised upward. The growth rate was boosted by a higher number of working days. Sales of cars increased by 3.7 pct. and contributed significantly to the growth. Other good results were registered by dealers of computer equipment, clothes and cultural and recreation goods. On the other hand, sales of food and fuels decreased, in real terms, by 0.4 and 0.9 pct., respectively. However, in current prices the sales of food and fuels are higher compared with the same period last year due to significantly higher prices.
After the retail data we see a slightly higher chance that, technically, the Czech economy has got out of recession in the 1Q. However, the domestic consumption is still too weak to spark any demand-driven inflationary pressures. Therefore, we do not expect the central bank to change its policy; the interest rates should remain unchanged in the months to come.