Retail performance in July not great, but also not terrible

We have a full set of July's retail sales data for the whole region. The beginning of the third quarter is not great, but it is also not terrible. Let's start with the good news. In Czechia, year-on-year sales growth outperformed expectations. Overall, the data affirm the ongoing favorable trends in the retail sector, primarily driven by a resurgence in household consumption. In Croatia and Slovakia, retail sales growth dynamics were solid in July as well. On the other hand, Julys' performance of the retail sector in Hungary, Poland, and Romania was a bit disappointing. Therefore, in Hungary, the recovery is likely to progress gradually due to the nearly double-digit positive change in real wages, although this increase might be somewhat hampered by the cautious behavior related to recent welfare losses, although this effect is diminishing. Finally, in Romania, although the growth dynamics decelerated in July, consumer confidence improved in August and remained above the long-term average. Romanian households are more willing to purchase big-ticket items in the next twelve months, and they are more optimistic about the general economic situation.