The volume of retail sales was up year-on-year by 6.8 percent and 5.2 percent in May 2016 and in the initial five months of 2016, respectively. The upward retail sales trend of 35 months is expected to remain in place for the remainder of the year, thanks to job and wage growth, low inflation and the reduction of the personal income tax rate.

According to data adjusted for calendar effects, the volume of retail sales rose by 5.7 percent, and thus the Hungarian growth figure was well above the EU average of 2.8 percent.

The volume of sales was up by 4.4 percent at specialized and non-specialized food retailers and by 6.8 percent at non-food retailers. The latter figure was mainly attributable to the 18.4 percent sales increase at mail order and internet retailers. However, it has to be noted that the statistics office registers the increasingly popular internet food orders as non-food sales.

The Ministry for National Economy is expecting the upward retail trend in place for some three years to continue in the remainder of the year. Concurrently, household consumption is set to increase, underpinned by factors such as the improving financial status of families due to favourable labour market processes, the rising real value of wages thanks to subdued inflation as well as to pro-consumption Government measures. On the other hand, retail sales growth has been lower than household income growth, which signals a high savings rate and, consequently, more financial manouvering room for families.

(Ministry for National Economy)