Low consumption holds back the economy, not only in retail

By: Trademagazin Date: 2023. 07. 06. 12:47

According to analysts, restrained consumption is holding back the economy. The May retail sales data was a negative surprise, and the annual decline was not unexpected.

Experts agree that only essential products are showing acceptable performance, while grocery store traffic continues to decline.

Households are saving due to reduced purchasing power and increasing their savings. The decrease in fuel traffic can be explained by the increase in prices and savings.

According to economists, consumption will restrain the economy in the second quarter, but the reduction of inflation and the stable forint exchange rate may provide an opportunity for change in the future. Consumption may decrease significantly throughout the year, but the drop in inflation and the increase in real wages may bring a revival in the later period.

A 6% decrease is expected for the year as a whole, but the sector may recover gradually from the second half of the year.