Hungarian retail sales saw a notable improvement in August, marking the first monthly rise since March 2024 as sales volume increased by 0.8% month-on-month, aided by a low base and a boost from the food retail sector.

Adjusted food sales increased by 7.5% (accounting for 50% of the total), non-food sales rose 2.9% (34%)  and vehicle fuel sales (16%) edged down 1.2%. Non-food sectors, such as pharmaceuticals and cosmetics, also saw strong growth.

 

The volume of mail order and internet retailing, accounting for 7.0% of all retail sales, rose by 6.1% y/y in August.

In absolute terms, retail sales came to HUF1.67 trillion (€4.15bn) in August.

For January-August, retail sales rose an adjusted 2.8% and an unadjusted 3.1% from the same period a year earlier.

This uptick, combined with improved tourism numbers, is a positive signal for the broader economy, especially after several months of stagnation, but it is too early to call it a turnaround, analysts said. Despite the rebound, the recovery in the retail sector still lags behind pre-pandemic levels, and the broader trend remains uncertain, they added.

The August data may point to a stronger third-quarter GDP, but it's too early to call it a sustained turnaround. The prospects will depend on whether this momentum continues, bolstered by rising real wages and consumer confidence, they added.

Higher purchasing power of households could give a boost to retail spending at the end of the year, however, consumer confidence, after an August rise, slightly declined in September, suggesting lingering caution.

Retail sales growth had been supported by a dynamic increase in real wages as consumers’ caution eased, the National Economy Ministry commented. Commenting on the data, the National Economy Ministry said.