Poor retail sales and industry data reported for December

HUNGARY - In Brief 05 Feb 2021 by Istvan Racz

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Following seven consecutive months of moderately positive mom growth rates, retail sales fell by 0.2% sda in volume terms in December. Needless to say, the last month of any year is of special importance in this respect, given that retail sales are typically 20-25% higher during the Christmas shopping season than the average sales turnover in other months.Even worse, the Statistical Office revised its numbers reported for a number of earlier months downwards. The revisions for single months look moderate, but accumulated they imply that yoy growth rates turned negative for each months since March 2020. There was thus a 1.6% yoy setback recorded for December and for Q4 alike, following a 2.1% yoy decrease in Q3. In the whole of 2020, retail sales dropped by 0.8%, following a healthy 7.7% growth rate in 2019.Quite obviously, this was the impact of Covid's second wave. In the runup to Christmas, the sales of food and daily items remained stable on yoy basis, but people cared less to buy durable items, which are typically the main driving force in commerce at this time of the year. They also bought substantially less of fuel, reflecting reduced levels of travel and probably smaller sales volumes in the services sector.Industrial production, a heavily export-driven sector in Hungary's case, is a somewhat different story. Here output turned down by 2.4% mom on sda basis in December, following -1% mom in November but positive growth rates, reflecting a robust recovery over the preceding six months. The December number is a bit tricky, as on unadjusted basis, output actually rose by 5.8% yoy, but there were two more working days than in the same month of 2019. Anyway, the day-...