Polish retail sales grew 8% y/y in constant prices in December, the growth rate easing from a surprise jump of 12.1% y/y the preceding month, statistics office GUS said on January 24.

The December reading landed clearly below market expectations for an expansion of 9.4% y/y. In m/m terms, sales grew an unadjusted 14.9% but declined a seasonally-adjusted 3.4%.

December figures may point to the high inflation beginning to subdue consumption or to households holding back spending after increased spending in November, Bank Millennium notes. Poland's central bank NBP is expected to deliver the fifth interest rate hike in as many months in early February to contain price growth in what many think is a much belated reaction.

Poland’s CPI surged 8.6% y/y in December and is expected to near the 10% mark in January. On the other hand, Polish households’ income situation remains very good, as wages grow amidst labour shortages. The unemployment rate in Poland was just 5.4% in December.

Seven out of eight main retail segments posted y/y turnover gains at constant prices in December, GUS showed in the breakdown of the data.

Of major segments, sales of textiles, clothing, and shoes expanded 31.1% y/y in the twelfth month. Food sales grew 0.9% y/y, while turnover in the fuels segment added 3.2% y/y, GUS data also showed.

Sales of pharmaceuticals grew 18.8% on the year. Sales of furniture, audio and video equipment, and domestic appliances grew 1.5% y/y.

The only retail segment to have suffered a turnover decline was cars. Sales in the segment declined 8.5% y/y. 

In current prices, retail turnover expanded 16.9% y/y (+21.1% in November) in December, while growing 15.8% in m/m terms (+0.2% in November).

Retail sales and other high-frequency data published for December point to a strong economic growth in the fourth quarter, analysts say.

“We expect GDP to increase 6.2% y/y in the fourth quarter after 5.3% y/y in Q3, and 5.6% in 2021 overall,” Bank Millennium said. The state-controlled PKO BP expects a growth of 6.5% y/y in Q4 and 5.5% in 2021. 

“We think that GDP expanded by around 6.8% y/y in Q4 which would leave Poland as the best performing economy in the region, but that the recovery will slow a touch at the start of this year,” Capital Economics said without presenting a full-year forecast.