Poland's Retail Sector Gains Momentum in June

Retail sales in Poland rose by 6.2% in real terms in June compared with the previous year, following a 3.0% increase in May. The Polish Central Statistical Office (GUS) announced this on July 22.

The June figures were about one percentage point above consensus forecasts. Among other factors, the higher number of trading days compared with the same month last year contributed to this. The strong growth in consumer spending has surprised many analysts, as real income growth for private households has recently slowed significantly.

“Despite a significant slowdown in real income growth—attributable to lower nominal wage increases and an unexpected rise in inflation—retail sales are accelerating,” explained Bank Pekao. According to analysts’ estimates, real wage growth already declined by about one percentage point in the first half of the year and could weaken further in the coming months.

At the same time, Pekao views the current figures as a positive sign for private consumption.

“June sales suggest stronger private consumption than was expected just a few months ago. Nevertheless, we continue to expect consumption growth to slow over the course of the year.”

Broad-Based Growth Across Nearly All Segments

According to GUS, all eight major retail segments posted year-over-year growth in June, after only six segments had grown in May. Durable consumer goods and food performed particularly well.

Sales of food, beverages, and tobacco products rose by 1.7%, after having fallen by 2.8% in May.

Sales of furniture, audio and video equipment, and household appliances rose particularly sharply. They increased by 14.8% compared with the previous year, following a 4.5% increase in May.

Sales of cars and auto parts also accelerated significantly, growing by 9.6%, compared with 2.1% the previous month.

Fuel sales increased by 9.0%, following a 9.9% increase in May. Sales of pharmaceuticals and cosmetics rose by 10.2%.

In the textiles, apparel, and footwear sector, growth was 3.3%, while the newspapers and books category rebounded by 3.0% after a decline in May. The other goods segment recorded an increase of 9.9%.

Positive Signs Also in Month-over-Month Comparison

Compared with the previous month, retail sales at constant prices rose by 1.4% in June, after declining by 1.7% in May.

At current prices, sales rose by 6.8% compared with the previous year, following a 4.4% increase in May. Compared with the previous month, there was a slight increase of 0.2%, after a 2.0% decline had been recorded in May.

The seasonally adjusted data were also positive. They show a 4.7% increase in retail sales compared with the previous year and a 1.7% increase compared with May.

Consumer spending remains a key pillar of the economy

According to Bank Millennium, the latest figures confirm an acceleration in Polish economic growth in the second quarter.

“Retail sales in June support our assessment that economic growth in the second quarter rose to around 3.7% year-over-year, following 3.5% in the first quarter,” the bank explained.

Analysts expect private consumption to remain a key pillar of the economy in the coming quarters, even though growth is likely to stabilize at around 3%. At the same time, investments—particularly those funded by EU grants—are expected to contribute increasingly to economic growth.

Millennium continues to cite the geopolitical environment as the greatest risk to the economy’s future trajectory.

No Interest Rate Cuts Expected for Now

According to Bank Millennium’s assessment, the latest economic data does not alter expectations for monetary policy.

Analysts continue to expect the National Bank of Poland to leave its key interest rate unchanged in the coming months.

The central bank had cut the key interest rate once this year by 25 basis points to 3.75%—the lowest level since March 2022—and has left it unchanged at four consecutive meetings since then.