Europeans do not reduce consumption despite high prices

Despite accelerated inflation, rising interest rates and expensive fuels, household consumption in the European Union remains at stable levels, at least for now. The volume of retail trade increased by 0.3% on a monthly basis in July, both in the EU and specifically for the countries of the euro area, according to Eurostat’s seasonally adjusted estimates.

Thus, in July, retail trade in the EU recorded growth after a 1% month-on-month decline was reported in the previous June. On an annual basis, however, the turnover of retailers decreased by 0.5% in the EU and by 0.9% in the eurozone countries.

Bulgaria remains among the countries with the highest inflation in the European Union and in July, according to the data of the European Statistical Service…

In Bulgaria, the turnover in the retail trade recorded a minimal decrease of 0.1% on a monthly basis after a contraction of 1.7% was reported in the previous June. On an annual basis, the volume in retail trade decreased by 0.7%, against a growth of 0.1% in the previous month.

The data show that high prices have not yet led to a drastic contraction of consumption, but on the other hand, the trend of growth after the pandemic has been “broken”, commented economist Lachezar Bogdanov in a post on social networks.

“So far (as of July) inflation, high fuel prices and expected recession and interest rate hikes have not ‘crushed’ household consumption in Europe.” For July 2022, we see minimal growth from June and minimal decline from July 2021 in real retail sales volumes. Sales are still higher than the pre-crisis July 2019. However, the post-pandemic growth trend has been broken. In Bulgaria, retail sales in real terms are 43.1% higher than the average for 2015 and 16.2% higher than July 2019,” said Bogdanov in a Facebook post.

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The highest growth in consumption on a monthly basis in July was recorded in Germany (+1.9%), the Netherlands (+1.7%), Luxembourg and Poland (+1.5% each). The biggest decrease was observed in Austria (-1.8%), Finland (-1.7%) and Spain (-1%).

On an annual basis, the turnover of retailers grew most significantly in Slovenia (+25%), Malta (+9%) and Poland (+7%). The most serious retreat was registered in Denmark (-7.7%), Luxembourg (-6.3%) and Ireland (-6.5%).

The retail trade volume index measures changes in retail sales adjusted for price changes. In other words, retail sales volume figures are deflated, that is, they are based on the total amount of goods sold.

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The article is in bulgaria

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