Retail sales growth comes in below the expectations
Nominal retail sales growth in enterprises employing more than 9 people went down to 5.3% YoY in July, from 6.8% in June, coming in below the market consensus (5.6%) and our forecast (6.5%). The growth in retail sales at constant prices also slowed, from 6.2% YoY in June to 3.9% in July, printing below the market consensus and our forecast (4.5%). The slowdown in retail sales growth between June and July was partly due to unfavourable calendar effects (June 2026 had one more working day than June 2025, while July 2026 had the same number of working days as July 2025). The end of the government’s intervention in the fuel market (the CPN programme) also weighed on retail sales growth, which was reflected in a sharp slowdown in sales growth in the “solid, liquid and gaseous fuels” category to -0.2% YoY, from 9.0% in June. Seasonally-adjusted retail sales at constant prices contracted by 0.3% MoM in July. Consequently, sales in July remained just below the all-time high recorded in March this year.
Strong demand for durable goods continues
The slowdown in retail sales growth in July was broad-based, with growth accelerating only in the “pharmaceuticals, cosmetics and orthopaedic equipment” category (10.8% YoY vs. 10.2% in June). However, sales growth in durable goods categories remained strong. Sales of “motor vehicles, motorcycles, parts” at constant prices increased by 8.1% YoY, compared with 9.6% in June. Meanwhile, sales growth in the “furniture, electronic goods and household appliances” category slowed to 8.8% YoY, from 14.8% in June. The continued strong pickup in demand for durable goods points to a sustained recovery in consumer demand, supported by marked real wage fund growth in the enterprise sector (see MACROpulse of 20/08/2026). The positive tone of the July sales data is also supported by solid growth in underlying retail sales excluding food and fuel (5.8% YoY vs. 7.5% in June) and the two durable goods categories discussed above (3.0% YoY vs. 5.1%). Favourable consumer sentiment is providing further evidence of the durability of consumer demand recovery. Although confidence indicators measuring current and expected conditions for making “major purchases” declined in August, they remained at historically elevated levels.
Slight downside risk to Q3 consumption growth forecast
The July retail sales and consumer sentiment data support our view that the adverse impact of the conflict in the Middle East on households' propensity to consume remains limited and that consumer demand will remain an important driver of economic growth in Q3. Today's data points to a slight downside risk to our Q3 consumption growth forecast (2.3% YoY vs. 2.0% in Q2). Combined with the July industrial production and construction and assembly production data released earlier (see MACROpulse of 20/08/2026), it also points to a slight downside risk to our Q3 GDP growth forecast (3.3% YoY vs. 3.8% in Q2).
We believe that the overall tone of today’s data from Polish economy is neutral for the PLN and the yields on Polish bonds.
