NGM vs. OKSZ: consumption is increasing due to margin reduction – claims the government

A new public debate has erupted about the situation in retail trade: according to the government, OKSZ drew a “false parallel” between the March turnover data and the margin cut and formulated incorrect conclusions. OKSZ had previously indicated that despite the officially reduced prices, retail trade did not significantly recover, and in fact, demand decreased.

“It also goes against common sense”

According to the NGM, the suggestion that lower prices would result in falling demand “goes against common sense and the fundamentals of economics”. On the contrary: according to the ministry, the margin cut significantly contributed to the expansion of household consumption.

It is worth noting: even the OKSZ’s own statement admits that a “buying wave” began after the measure – however, this is not yet reflected in the official KSH data.

Why is it not visible in the data?

According to the government, the effect of the margin reduction is not yet reflected in the statistics for two reasons:

Easter effect – while last year Easter was in March, this year it was in the second half of April, so the timing of holiday shopping is also different.

KSH methodology – KSH collects data by the 20th of each month, but the margin reduction was introduced on March 17. Thus, the effect of the measure could only be partially reflected in the March figures.

The Ministry of Finance therefore warns: the March and April data must be evaluated together, as they will together provide an accurate picture of the development of retail trade.