Market Report, "Hungary Retail Report Q3 2013", published

From: Fast Market Research, Inc.
Published: Fri Aug 30 2013

The Hungary Retail Report examines the long-term potential of the local consumer market but flags shortterm concerns about the impact on Hungary's economic outlook of investor fears regarding central bank independence and potentially inflationary monetary policy.

The report examines how best to maximise returns in the Hungarian retail market while minimising investment risk, and also explores the impact of continued uncertainty in the eurozone on the Hungarian consumer and on the ability of producers and exporters to realise returns in the short term. The report also analyses the growth and risk management strategies being employed by the leading players in the Hungarian retail sector, as they seek to maximise the growth opportunities offered by the local market.

Full Report Details at

Hungarian per capita consumer spending is forecast to increase by 14% to 2017, compared with a regional growth average of 37%. The country comes seventh out of 10 in BMI's Central and Eastern Europe Retail Risk/Reward Ratings, although it outperforms slightly for risk.

Among all retail categories, consumer electronics will be the outperformer through to 2017 in growth terms, with BMI forecasting sales to expand by around 21%, from US$2.51bn in 2013 to US$3.04bn by the end of the period. The market offers continued growth potential due to relatively low household penetration rates for digital product groups such as notebook computers and LCD TV sets. In the competitive arena, BMI sees upside potential in an influx of EU funds that will help boost spending on computers and drive information society development; while government spending on information and communication technology initiatives, especially related to education, will also increase demand.

Over the last quarter, BMI has revised the following forecasts/views:

* BMI has revised its forecasts for Hungarian GDP growth in 2013 and 2014. As a result of improving consumer sentiment and rising retail sales we have revised up our end-2013 real GDP forecast marginally, from -0.3% to -0.1%. We hold to our view that a recovery in export and household consumption in 2014 will drive real GDP growth to 1.1%.
* Private consumption, the largest component of GDP expenditure in Hungary, will face another year of decline in 2013, after contracting 2.0% year-on-year in 2012. First quarter 2013 data show a 1.2% y-o-y fall. Despite a 34-year low in consumer price inflation and the lowest policy rate on record (4.25% at the time of writing) private consumption has remained subdued. Retail sales increased just 1.8% y-o-y in April, down from 7.0% y-o-y growth in the same period of 2012, and consumer confidence remains staunchly negative at -33.9 in June.

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