Hungary's Retail Sales and Industrial Output Plunge Amidst Constrained Domestic Demand
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Hungary's retail sales and industrial output continue to plunge
With domestic demand severely constrained, both the retail sector and Hungarian industry are struggling, and we don’t see a path for a swift recovery.
There is nothing surprising in the latest data release from the Hungarian Central Statistical Office (HCSO). As we predicted in our latest Monitoring Hungary report, the drop in real wages has been constraining both household consumption and domestic demand towards goods. Now the latest economic activity figures for May confirm this, as the volume of retail sales dropped by 12.3% year-on-year (YoY), while industry registered a 4.6% YoY plunge in the volume of production (both working-day adjusted data).
As both sectors continue to struggle with weak domestic demand, the fate of GDP growth in the second quarter hinges vastly on the outperformance of agriculture.
Industry continues to face opposing forces
