According to the figures released by the National Institute of Statistics (NIS) this morning the retail sales (a proxy for the private consumption, the main component of the GDP) rose by 0.1% M/M in Jan, following the contraction by 1.3% M/M in Dec. There can be noticed the increase of the sales of food/beverage/tobacco by 0.2% M/M, after contracting for two months in a row. The sales of fuels advanced for the third month in a row in Jan, but the M/M pace decelerated to 0.5%. On the other hand, the sales of non-food goods declined for the second month in a row in Jan, by 0.7% M/M. The Y/Y pace decelerated to 4.1% in Jan, the lowest since Mar 2024, due to the slowing-down of the sales of non-food goods to 7.0% Y/Y, the minimum since Mar last year. The sales of food/beverage/tobacco contracted for the second month in a row in Jan by 0.9% Y/Y. On the other hand, the sales of fuels accelerated to 7.3% Y/Y in Jan, the highest level since Jun 2024.
Our view: The slowing down of the Y/Y pace of retail sales in Jan (in line with our macroeconomic scenario) was determined by the accumulation of risk factors in the national economy, with impact for the households’ income (including the freezing of the public wages and pensions), leading to the consolidation of the upward trend for the savings rate. However, the retail sales rose for the seventh month in a row in Jan by a higher pace compared to its trend, an evolution confirming the positive climate in the private consumption, supported by the upward trend for the real wage. In our current scenario (to be revised in Mar) the private consumption would increase by a Y/Y pace slowing down to 2.5% in 2025, but accelerating to 3.0% in 2026 and 3.4% in 2027 | NEUTRAL
