Actual retail sales (Sep): 0.0 % m/m, 0.3 % y/y
Consensus: -0.1 % y/y
Previous (Aug): 0.4 % m/m, 0.4 % y/y
We have got another reading from the Hungarian retail sector that is quite good. The sales went up year on year, while a marginal decrease was expected. However, they stagnated over the month. The internet sales surged by a pace unseen since 2008 and also sales of fuels and medical goods went up. Sales of food slowed down but still contributed positively. Nevertheless, the positive contribution was offset by decreasing sales of textiles, second-hand goods and household equipment.
In 2011 retail sector has been roughly stagnating. Although two months in a row have brought better-than-expected figures, we are still far from being optimistic about future improvement. Given current contitions on the labor market, stagnation should continue. The figures will likely have no impact on monetary policy. Despite weakness of the domestic demand the central bank must stay alert to support the forint by lifting rates. As risk aversion rises, the hike will likely come soon.