Polish retail-sales growth slowed in April for a third month as expansion lost pace in the European Union’s largest eastern member, bolstering arguments for the central bank to refrain from raising borrowing costs.
Sales advanced 5.5 percent from a year earlier, compared with a 10.7 percent increase in March, the Central Statistical Office in Warsaw said today. The figure compares with a 9.3 percent median estimate of 26 economists surveyed by Bloomberg. Retail sales fell 2.4 percent from the previous month.
The Narodowy Bank Polski raised its main rate by a quarter point to 4.75 percent earlier this month on sustained high price growth and expectations the country’s economy will avoid a steep slowdown. The bank didn’t rule out another rate increase.
“These data reduce the probability of a rate increase, but we’re not sure they’re enough to rule one out,” Ernest Pytlarczyk, head of financial markets research at BRE Bank in Warsaw, said by phone. “July is the most probable moment.”
The zloty gained to 4.3420 per euro at 10:28 a.m. in Warsaw, up 0.5 percent on the day. The average yield on the Polish two-year government bond fell 3 basis points after the data to 4.79 percent.
Central banker Jerzy Hausner said yesterday that the Monetary Policy Council will consider tightening rates at its forthcoming meetings, “though more evidence is needed before raising borrowing costs further.” The council will hold its next rate meeting on June 5-6.
Today’s report capped a series of data in April indicating the Polish economy is losing momentum. Industrial output growth rose 2.9 percent last month, less than a half of the pace from a year ago, while employment and wages grew at the slowest rate in almost two years. The government forecasts the economy will slow to 2.5 percent this year from 4.3 percent last year.
In a separate report, the statistics office said the unemployment rate fell to 12.9 percent in April from 13.3 percent in the previous month. That matched the median forecast of 25 economists surveyed by Bloomberg.
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