Retail sales grew by 6.7 percent in April compared to the same period in the previous year, meaning sales have now increased for the 34th consecutive month. In international comparison, April’s increase in retail sales in Hungary was the highest in the European Union and well above the EU average of 2.4 percent.

With relation to the components of the retail sales figures, the 11.3 percent April increase in non-food retail sales represents a continuation of the growth that has been achieved continuously for almost three years now. In accordance with international trends, a significant, 31 percent increase in sales by parcel delivery service providers, which mirrors a rise in internet sales, played a major role in this increase.

Sales by stores selling food and non-specialised services with food also increased by a further 3.9 percent in April, despite the fact that sales already exceeded pre-crisis record levels in 2014.

Fuel sales increased by 3.5 percent, contributed to by the fact that fuel prices fell by 10.8 percent over the course of a year parallel to continuously decreasing oil prices.

A significant, 5 percent increase in household consumer spending can be observed, the highest increase since 2003, which confirms the return of families’ buying mood; families have a much more positive view of their income prospects. Retail growth is expected to continue this year, coupled with an increase in household consumption. This is the result of several factors: on the one hand family incomes will continue to increase in harmony with favourable job market processes, in addition to which the low inflation environment increases the real value of wages, while a range of Government measures are also working to facilitate an increase in consumption. Thanks to the 1 percent decrease in the rate of personal income tax, a total of 100 billion forints (EUR 318M) will remain with households. In addition, the gradual increase in tax benefits for families with two children and the decrease in VAT on pork to 5 percent also facilitate a further increase in consumption.

(Ministry for National Economy)