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Retail trade dynamics strongly accelerated toward the end of the last year

Company: Amcham

Retail trade dynamics strongly accelerated in November and printed 7.9% yoy growth. An increase in sales was recorded across all main goods categories. Today’s figures confirm that economic growth accelerated toward the end of last year. The main growth driver is household consumption.

Retail sales (adjusted for car sales) surpassed all expectations by increasing 1.9% mom after seasonal adjustment. Yoy growth jumped to 7.9% helped by a higher number of working days. After adjusting for calendar effects, sales increased 6.7% yoy. The biggest increase was recorded in non-food goods, which increased a strong 12.1%. This reflects the increasing purchasing power of households. Consumers’ good mood is especially apparent in their interest in culture and recreation (+7.7%).  Still relatively cheap fuel helped increase its sales 6.5%. The weakest growth was recorded in food sales, which increased only 2.3%. Demand for food does not react sharply to the growing purchasing power of households.


Car retailers also did well in November. Their sales increased 2.5% mom after seasonal adjustment. Yoy growth printed 9.9%. These figures confirm households’ appetite for spending on durable goods.

Households will continue to do well. We expect retail sales will retain sound dynamics. The reason is the growing purchasing power of households. Last year, purchasing power was supported by growth in employment, but this year we expect wage growth will be the main driver. The only factor impeding retail sales is the return of inflation, which already hit 2% at the very end of the year. According to our forecast, inflation will not move far from this level this year. We expect retail sales to grow 3.8% on average in 2017. Private consumption will, according to our estimate, increase 2.7% and be the main GDP growth driver.

Tags: Economics | Finance |

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