February's decline in Polish retail sales was larger than expected, which may indicate a further slowdown in demand while suggesting that a decline in gross domestic product (GDP) at the beginning of 2023 may be deeper than the central bank forecast.
The statistical office said retail sales fell 5.0% in February following January's drop of 0.3%, while analysts had expected a fall of 1.4%. It was the weakest result since November 2020.
"Hopeless data on retail sales: -5.0% ... The bottom of GDP in the first quarter will be deeper than in the NBP projection," mBank analysts wrote on Twitter.
In its March forecast, the central bank predicted that Poland's GDP would fall 0.4% in the first quarter of 2023.
"High inflation is taking its toll, and consumers are cutting back on spending," ING analysts said in a note.
"Food sales fell for the second month in a row. In the first quarter, we will see another decline in consumption on an annualised basis, which will contribute to a decline in GDP."
In February inflation accelerated to 18.4% year on year from 16.6% in January.
The statistics office said fuel trading companies reported the largest decrease in sales, of 26.2% on the year, while sales of food fell by 4.6%. Sales of cars, cosmetics and clothing increased.