Retail sales in Hungary rose by an annual 6 percent in May, the fastest rate in almost a year, a first reading of data released by the Central Statistical Office (KSH) on Wednesday shows.
Adjusted for calendar year effects, retail sales were up 5.4 percent. Adjusted food sales climbed 2.6 percent, non-food sales jumped 9.8 percent and fuel sales rose 4.3 percent.
Retail sales rose an unadjusted 3.7 percent and an adjusted 3.5 percent year on year in January-May.
Economy Minister Mihály Varga told public television in reaction to the data that retail sales were growing thanks to higher wages and disposable income, a third of which is saved while the rest is spent on consumption.
Growth in petrol revenues is an indicator of growth in the economy as a whole, while higher sales in food and non-food retail products were also seen, Varga said. The hike in the minimum wage has helped people on a lower income, he said, adding that these consumers typically use a higher portion of their income to buy food products, which indicates further growth in that sector too.
The May data supports the government forecast of over 4 percent annual economic growth, Varga said.
Erste Bank chief analyst Gergely Urmossy said May and April retail data confirm expectations that domestic demand will be an important element of Q2 GDP growth data.
Takarékbank analyst Gergely Suppán said that households are not only buying more things, they are also spending more on catering, tourism, recreation and other services.
In a caveat, K and H senior analyst Dávid Németh said measures introduced as part of a government crackdown on tax evasion may have artificially lifted the retail sales data.