Retail performance remains strong in CEE, but varies significantly

Several CEE countries have released December's retail sales growth over the last couple of days. The retail sector proved to be very strong in Czechia, Romania, and Slovakia (6.2% y/y, 7.8% y/y, and 10.1% y/y growth, respectively), while in Hungary, the retail sector barely expanded (0.1% y/y growth in December). Prior to these releases, we saw retail sales growth in Croatia, Poland, and Serbia. In Croatia, retail trade maintained a positive footprint as the headline figure growth remained strong at 6.5% y/y in December, while in Poland and Serbia, growth dynamics were much weaker (1.9% y/y and 0.8% y/y, respectively). On the one hand, a strong labor market and solid growth of nominal wages support a high level of spending. However, consumer confidence (which visibly correlates with retail sales growth) has been easing. At this point, we expect private consumption growth in 2025 to be comparable to 2024 developments.