Unexpectedly, given the much higher prices, the increase was driven by stronger fuel sales (+2.5% y\/y), while the dynamics of food and non-food sales suggest continued pressure on household budgets: food sales contracted by 2.3% y\/y, contrasting with a 2.7% increase in non-food sales.<\/p>\n
\u201cConsumption is starting to show a clearer improvement in the third quarter, supporting our view that consumer spending should strengthen somewhat in the second half of the year,\u201d according to a research note published by Erste Group.<\/p>\n
The 2.3% m\/m increase in August, following a 0.7% m\/m rise in July, could be interpreted as consumption gaining momentum. In perspective, however, this represents a short-term recovery that needs further confirmation before it can be seen as a sustainable trend. The two-month increase was again concentrated in fuel and non-food sales, which rose by 3.6% and 3.9%, respectively, compared with a 1.3% increase in food sales.<\/p>\n
The VAT rate hike in August 2025 had a significant impact on retail sales<\/strong><\/p>\n Retail sales were 4.7% lower in the 12 months to August 2026 than in the 12-month period to July 2025, before the VAT rate hike. The decline was broadly similar for food and non-food sales, at 5.0% and 5.1%, respectively, while the decline in fuel sales was comparatively smaller, at 3.0%.<\/p>\n The correction in private consumption is consistent with the decline in real wages: real wages were 5.2% lower in the 12 months to July 2026, the latest period available, than in the 12 months preceding the VAT rate hike.<\/p>\n High-frequency data show divergent consumption patterns<\/strong><\/p>\n High-frequency data are relevant for assessing consumer behaviour during the 13 months since the VAT rate hike.<\/p>\n Non-food sales, which are more discretionary, fell sharply at key moments \u2013 in August following the VAT increase and again in January after the Christmas shopping period, when households became aware that annual wage adjustments were lower this year, where they were granted at all. They have subsequently recovered gradually during 2026, reflecting an improvement in consumer confidence, particularly among higher-income households.<\/p>\n Food sales, which better reflect the budgets of households under greater financial pressure, have instead followed a gradual downward trend throughout the 13-month period. The pick-up in July-August came from a low base and therefore points to stabilisation at best.<\/p>\n Fuel sales have also followed a broadly declining trend, although they increased in June, when higher wage income may have supported consumption, before recovering further in July-August.<\/p>\n Consumption recovery expected in 2027<\/strong><\/p>\n A recovery in private consumption is broadly expected in 2027. Public-sector wage and pension indexation in January, combined with lower inflation, should support real incomes and therefore stronger consumption next year.<\/p>\n However, higher utility bills during the winter, elevated energy prices more generally and uncertainty over economic growth \u2013 with potential implications for private-sector wages \u2013 make the magnitude of the consumption recovery difficult to assess. Base effects could nevertheless produce relatively strong growth in the first half of next year.<\/p>","protected":false},"excerpt":{"rendered":" Unexpectedly, given the much higher prices, the increase was driven by stronger fuel sales (+2.5% y\/y), while the dynamics of food and non-food sales suggest continued pressure on household budgets: food sales contracted by 2.3% y\/y, contrasting with a 2.7% increase in non-food sales. \u201cConsumption is starting to show a clearer improvement in the third […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-12339","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/ofero.news\/index.php?rest_route=\/wp\/v2\/posts\/12339","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ofero.news\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ofero.news\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/ofero.news\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12339"}],"version-history":[{"count":0,"href":"https:\/\/ofero.news\/index.php?rest_route=\/wp\/v2\/posts\/12339\/revisions"}],"wp:attachment":[{"href":"https:\/\/ofero.news\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12339"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ofero.news\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12339"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ofero.news\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12339"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}