Retail trade data in Hungary came in even better than expected, as the volume of sales gained 8.7 percent in the first month of the year. As a result of the upward trend, which has been in place for more than one-and-a-half years, turnover has reached the pre-crisis level.

The main factors behind higher retail sales are improving conditions on the labour market and rising incomes. In the coming months, one-off forex loan refunds and lower loan instalments are expected to drive expansion.

In January 2015, the volume of sales at stores of food, beverages and tobacco products was up by 5.7 percent; within that category, sales grew by 6.6 percent at non-specialized food retailers and by 2.6 percent at specialized food, beverage and tobacco stores compared to January 2014. The non-food retail sector saw a sales volume increase of 12 percent, as sales in non-specialized stores, books, computer equipment and other specialized stores soared by 17%. In January 2015, sales at filling stations were up by 10 percent, thanks to the more than 16 percent drop in fuel prices over the past one year. The volume of sales at internet retailers jumped 40 percent.

Higher retail sales are also reflected in GDP growth, as household consumption gained 1.7 percent in 2014, year-on-year. In light of turnover data of past months and future income and exchange rate expectations, household consumption may increase even more than the 2.6 percent growth predicted in autumn.

(Ministry for National Economy)