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Monday, June 25, 2007

April Retail Sales Down

From Bloomberg this morning:

Hungarian retail sales fell from a year earlier in April, the second month with a decline, signaling a drop in consumer demand that may allow the central bank to cut the European Union's highest interest rates.

Retail sales fell 2.5 percent from April 2006, the Budapest-based statistics office said in an e-mailed statement today.

In a May 21 report, the central bank said it now expects to meet its 3 percent goal for annual inflation in the first quarter of 2009, rather than in 2008, as previously forecast.

Portfolio Hungary is also running the story and makes this comment:

The 2.5% yr/yr decline is the greatest fall detected in this decade. The trend gives reason for concern also because it shows that the impact of the government austerity measures was not merely a one-off dip, but a prolonged decrease. On the other hand, this indicates that consumption smoothing is not as strong as it was assumed it would be, i.e. consumers do not hold back their purchases as drastically as the drop in real wages would warrant them to.

This graph is also pretty revealing:

and this one:

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