Retail Sales Increasing in Spite of the Crises

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According to Eurostat retail sales increased by 1.4% over the last month. Despite rising inflation and worsening economic forecasts, Poles are buying more. According to Eurostat, retail sales in Poland increased by 8.4 percent in September. Compared to the previous month, the increase was 1.4 percent.

This is another month when, despite the crisis, stores record higher sales. In August, the European statistical agency recorded an increase of 8% in Poland.

The data collected by Eurostat include not only large retail chains, but also small family stores employing less than 8 people. Annual data are seasonally adjusted for the number of working days. They do not include car sales.

On Tuesday, Eurostat released retail sales data for the entire eurozone. The results are better than market expectations. Sales fell, though only by 0.6% on an annual basis, while most analysts forecasted a decline of 1.3%.

The pace of decline in retail sales in the euro area clearly decelerated after retail sales fell by 1.4% in August. The main reasons for the decline in retail sales in Europe are high inflation and rising European Central Bank interest rates, which are at their highest levels since the creation of the euro area.

On Wednesday, October 9, the Polish Monetary Policy Council will decide on a possible interest rate hike. At the September meeting, the MPC members kept the interest rates unchanged, awaiting the latest inflation projection.

It is hard to predict what the Monetary Policy Council will do, but some economists argue that interest rates will be raised by 25 basis points. The reference rate will thus be raised to 7%.

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