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The strong consumer spending of the Hungarian population in December was more reflected in sales abroad than in domestic stores, the Ministry for National Economy commented on the latest data of the Hungarian Central Statistical Office (KSH).
The ministry’s statement recalled that based on the data of the KSH, retail sales in 2024 increased by 2.6 percent overall compared to the previous year. The trend growth in retail sales is a clear sign of the turnaround in the domestic economy and the continued strengthening of the middle class, they noted. This has been supported by more than a year of real wage growth and a strengthening of the purchasing power of the population, as well as high employment.
According to calendar-adjusted data from the KSH, retail sales expanded by 0.1 percent year-on-year in December 2024, down 1.2 percent from the previous month.
The slowdown is a temporary phenomenon, mainly caused by increased travel abroad by Hungarian families and a decline in fuel sales, as a result of a significant base effect,
the statement said.
Volume contribution to the change in turnover of retail stores. Food / Non-food / Fuel. Graph: KSH
In December, fuel retail sales volumes fell by 6.9 percent on an annual basis, and by three percent on a monthly basis.
Taking advantage of the long six-day Christmas weekend, Hungarians traveled abroad in record numbers, which dampened retail performance at the end of December.
In December, 302,000 more Hungarians traveled abroad, with 212,000 of them leaving from Budapest’s Liszt Ferenc Airport, up 19 percent from a year earlier. There was also a significant increase in outbound car travel, with 107,000 more Hungarian-registered cars crossing the border, particularly to Austria and Slovakia, the vast majority of which were for tourism rather than shopping.
The increase in foreign travel had a noticeable impact on domestic retail sales, with December spending missing out by HUF 50-55 billion (EUR 123-136 million) compared to the growth trend of previous months.
With nearly 302,000 more Hungarians traveling abroad, this means that HUF 166-182,000 (EUR 410-450) was spent abroad per person rather than in domestic trade.
This means that in December, strong spending by the Hungarian population happened abroad rather than in domestic store sales, says the statement.
Consumer confidence continues to grow, with Hungarian families spending more and more, the ministry concluded, adding that based on the available data, domestic retail sales expanded again substantially in January.
Via MTI, Featured image: Pixabay