Actual (Oct): -0.7 % y/y
Consensus: 1.0 % y/y
Previous (Sep): 3.5 % y/y
The October ratail data came out below estimates as the sales decreased slightly. The headline figure was pushed lower by the falling sales of fuels and food. The sales of cars still showed a y-o-y growth but it has slowed down significantly compared with the previous months. Moreover, a negative impact came from a lower number of working days (-1) in October 2010.
After the relatively strong August and September figures, the ratail sector shows that the recovery is rather volatile than accelerating. Situation on the labor market cannot give the sales a significant boost as unemployment is stagnating around 8.5 pct and wages show only marginal real growth (+0.1 pct in 3Q). Both the weaker retail trade and the slower industrial output favor stable CNB interest rates in the next months. The first hike is expected in the 2H/2011.
We expect the retail sales to increase in the last two months of the year, helped by base effect. The full-year figure should be about 1 pct.