Actual (Aug): 0.4 % y/y
Consensus: -0.9 % y/y
Previous (Jul): -1.3 % y/y
The retail sales showed a slight growth in August after the previous negative results. The sales were 0.4 pct higher both over the month and over the year. The figures are better than estimates as another decrease was expected. The growth was driven by food and household equipment. Sales of books, cosmetics and second hand goods, weight of which is lower, showed even higher growth rates. On the other side, we can see a decline in sales of textile and fuel. Also internet sales dropped after a strong growth in previous two months.
Overall, consumer demand is still weak. In 2011 it has been roughly stagnating. The August figures are good but more good monthly data are needed to change the view. However, they are unlikely to come given the still high unemployment and currently declining wages. Despite the condition of the domestic demand, interest rates are not expected to go lower. In fact, a hike becomes possible as risk aversion is high due to the Eurozone debt crisis and as the forint is currently under pressure.