2024 could already be the year of growth in retail

First of all, we see an improvement in quality in the food trade, which occurs instead of an increase in quantity. This means that the change in value is greater than the change in volume, which is partly caused by inflation. However, this qualitative improvement shows an increase in value, not necessarily in quantity. This is also shown by the February data, where the turnover of grocery stores decreased in volume, while it increased in value. “If we buy eight more expensive buns instead of ten cheap buns, there is an economic turnaround, but it is not yet visible,” they say.

In the second phase, it is expected that the quantitative improvement will also occur, which can help the expansion of consumption, but this will probably have to wait until the second half of the year.

Another condition for the expansion of consumption is the improvement of consumer confidence. Although there was some progress after the 2022 low, the indicator is still below the historical average. The precautionary motive remains strong, which may curb household consumption.

In terms of wage dynamics, the significant wage increases at the beginning of the year can be somewhat misleading. While employees hope for a significant wage increase, employers are more reserved. This can also affect household consumption and the expansion of available real incomes.

Overall, although external demand is weak and the internal engines of the economy are starting slowly, we can expect a more favorable picture in the dynamics of consumption in the second half of the year. The government also revised downwards its previous forecast for GDP growth, forecasting an expected growth of 2.5 percent.