Poland's retail sector weaker than expected

Polish retail sales rose in February - but the upturn is less convincing than hoped for. Despite a year-on-year increase of five percent, the trend fell short of analysts' expectations. One reason is the weather: the unusually cold February dampened the desire to buy, after many consumers had already made major purchases in January. However, economists see this as only part of the explanation. The figures are seen as the last unadulterated look at consumer sentiment before the recent upheavals on the energy markets. Analysts anticipate growing pressure in the coming months: rising prices coupled with moderate income growth could noticeably dampen purchasing power. This means that a central pillar of the Polish economy is beginning to falter. Private consumption has been an important growth driver in recent years - a slowdown would have a direct impact on the economy. Broad but uneven development Although sales increased in most segments, momentum slowed. This is particularly evident in the clothing sector: after a strong January, growth almost completely disappeared in February. Other areas showed a more stable development. Fuel sales increased significantly, while furniture and household appliances also recorded growth - albeit weaker than in the previous month. At the same time, sales of press and books fell significantly. Compared to January, retail sales fell significantly. Even adjusted for seasonal effects, there was a decline - an indication that the annual increase was mainly due to base effects. The figures initially change little for the Polish central bank. In view of rising energy prices and continuing inflation risks, it is likely to stick to its cautious course. Interest rate cuts currently appear unlikely - on the contrary: if price pressure continues to increase, the phase of stable or even higher interest rates could last longer than previously expected. The post Poland's retail sector weaker than expected appeared first on ostwirtschaft.de.