Poland posts record retail sales growth in April amid refugee influx and inflation

Retail sales rose 33.4% year-on-year in Poland in April, the highest growth rate ever recorded by Statistics Poland (GUS), a state agency. The influx of millions of refugees from Ukraine helped push up spending, while rampant inflation also had an impact on the figure, which is calculated at current prices.

The new figure surpassed the previous record of 22.7% set last year, also in April, which was itself due to the extremely low base effect of a dip in sales caused by the tough early lockdown imposed in spring 2020.

Since Russia’s invasion of Ukraine in late February, around 3.5 million people have crossed the border into Poland. It is estimated that between 1.5 and 2 million of them remain in the country.

“Food sales remained high [in April], which we associate largely with spending by (and for) refugees,” said analysts from mBank. They noted that April spending was boosted not only by the Easter celebrations of the Catholic majority around 17 April, but also by many Ukrainians a week later, in accordance with the Orthodox calendar.

High sales of clothing and footwear is also partly attributed to consumption by refugees, who often arrived with few possessions, note analysts, as is spending on furniture, household appliances and electronics to fit out accommodation for the new arrivals.

Influx of Ukrainian refugees stokes housing shortage in Poland

By contrast, fuel sales declined, mainly due to high oil prices caused by post-pandemic supply chain disruptions as well as the war in Ukraine.

However, because the 33.4% retail sales growth figure is calculated at current prices, it was pushed up significantly by inflation, which is at its highest level since the late 1990s, hitting 12.4% in April.

That is why many economists focus on the reading at constant prices, but that figure still surpassed expectations with a 19% increase year-on-year in April.

Main photo credit: Photo by Michael Weidemann on Unsplash

Source link

Leave a Reply

Your email address will not be published.