Slow growth continues in retail

The retail turnover in September (in comparative prices, excluding seasonal factors) grew 1.2% month-on-month, with the slow upward trend thus continuing. This growth has been uneven by group of goods: the sales volumes of non-food goods have increased 2.0%, but those of food items have decreased by 0.2%.

It is already possible to detect the common indicator for the entire quarter: in the third quarter of 2010 the retail turnover has increased 1.0% quarter-on-quarter. Taking into account the fact that in previous years the retail turnover shrank more than by one third, this moderate growth should be considered stabilizing instead of a substantial renewal of demand.

As for the prospects for the near future - a further growth in the retail turnover could be expected in October, possibly even greater than before. The substantial improvement in the October mood of merchants and consumers alike points to this: after the slight deterioration in September consumer confidence was substantially, 4.4 points, up and the trade confidence indicator grew 1.8 points. Although the plans for the state budget still are quite uncertain, at least one of the unknowns, the parliament elections, is already behind us. The election result maybe the one factor that has improved the mood of the population. The positive changes in the labour market indicators have also promoted a more positive assessment of future prospects.

Any excessive optimism is dampened by the serious risk that the mood may once again deteriorate, as it is to a great extent related to the worry whether the drafting of the 2011 budget will be unanimous and fast paced enough and what will be the nature of the consolidation decisions to be adopted.