Polish Retail Sales Beat Estimates, Increasing Pressure for Rate Increases
Polish retail sales increased faster than economists expected in March, fueling speculation the central bank will raise interest rates again to control inflation.
Retail sales grew an annual 9.4 percent in March, the Central Statistical Office in Warsaw reported today, compared with the median estimate of 7.8 percent from 19 economists surveyed by Bloomberg. Sales rose 18.8 percent on the month.
The figures come as the central bank’s Monetary Policy Council considers when to increase borrowing costs again, after raising the benchmark rate to 4 percent this month to curb inflation and strengthen the zloty. Inflation accelerated to 4.3 percent in March, the fastest pace in 2 1/2 years.
“Today’s figures will definitely send a signal to the council, as higher sales could be carried over to prices, bringing the risk of inflation,” said Piotr Bielski, an economist at Bank Zachodni WBK in Warsaw. He said he doesn’t expect the central bank to raise rates in May.
The Monetary Policy Council holds its next rate-setting meeting May 10-11.
Retail sales slowed from an annual 12.2 percent in February mainly because the Easter holidays were earlier last year, Bielski said.
“We’ll see the effect of Easter shopping a month later this year,” he said by phone after the release. “But today’s data show that consumer demand is still high in Poland and is growing at a very decent pace.”
Consumer confidence improved to minus 26.8 in April from minus 29 in March, the statistical office said in a separate statement. The index forecasting confidence for the year-ahead period improved to minus 29.8 from minus 34.1.
Unemployment fell to 13.1 percent in March from 13.2 percent the month before, the statistics office reported today, matching the forecast of 21 economists in a Bloomberg survey.
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