More sluggish news about the Eurozone economy as consumers postponed the retail recovery once more. While second quarter GDP surprised to the upside, there are reasons to be concerned, says ING analysts.
A long retail recession followed a post-pandemic boom, and a recovery has been expected for some time. While indeed it looks like a bottom in retail activity has been reached, volumes are just not increasing. A 0.3% decline in June in the eurozone illustrates that the consumer is taking longer to recover from the inflation shock and still maintains a preference for buying services over goods, although this preference is becoming smaller.
Overall, the second quarter was better than expected for economic growth in the eurozone, but worries about the economy slowing in the second half of the year remain.
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Statistics show that Hungarian retail sales dipped in June, however Romanian sales in this month showed signs of increase.
In light of the second-quarter GDP data, the Hungarian retail sector's underperformance in June was not unexpected. However, the sector continued to fall short of analysts' expectations. Retail sales in Hungary declined by 0.1% month-on-month (MoM) in June, which paints a bleak picture overall, especially in light of the relatively weak 0.1% MoM increase in volumes seen in May.
Meanwhile, Romanian retail sales increased 1.8% month-on-month in June, following April's 0.3% MoM contraction. This represents the second strongest monthly increase of the year, after January's whopping 4.6%. Looking at the monthly breakdown, food sales almost stagnated at 0.1% MoM (1.1% in May). Meanwhile, non-food sales picked up 1.8% (-1.6% in May), and fuel sales increased sharply by 4.4% (-0.5% in May).
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