Macro View

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Portuguese Economy – December real retail sales surprised on the upside, mainly due to non-Food revenues, +4.4%YoY, after a modest figure in November. Food sales remain in negative territory; however the base effect should help food sales from January onwards and will become tougher for non-Food sales.    

Summing up, Non-Food real sales surprised in December +4.4%YoY, after a smaller figure in November (car sales in December +17%YoY) and was enough to show positive Retail sales +0.6%YoY; as Food sales remain in negative territory (-3.4%YoY). The Portuguese economy is surprising on the upside, showing a strong resilience, after several mortgage interest rates increases, in fact, VAT revenues in December +10%; were already a signal retail sales were performing. Nevertheless, the base effect is not helping the non-Food retail sales until April/May23, while in term of Food, figures should improve, mainly due to the base effect.

The Portuguese Statistic Institute (INE) has just released December’s Retail Sales data.  

We would highlight the following:

• Retail sales deflated raw data (without service stations): +0.6%YoY vs. 12MMA (12 month moving average) +5.7% and 3MMA +0.7%;
• Non-food Retail sales deflated raw data (without service stations): +4.4%YoY vs. 12MMA +14.3% and 3MMA +4.8% (car sales in December: 17%YoY);
• Food Sales, deflated raw data: -3.4%YoY vs. 12MMA -1.5% and 3MMA -3.5%;
• Nominal Food sales (raw data): +11.1%YoY vs. 12MMA +10.6% and 3MMA +11.5%;
• Clothes, Shoes & Textile (nominal raw data): +16.7%YoY vs. 12MMA: +63.7% and 3MMA: +11.1%;
• Household good (nominal raw data): +9.9%YoY vs. 12MMA: +13.9% and 3MMA: +9.5%;

• Mail and Internet deliveries (nominal raw data): +16.2%YoY vs. 12MMA: 8.2% and 3MMA: +22.9%.

Separately, the Spanish Statistic Institute released, December’s “Mail and Internet deliveries”: -5.3%YoY vs. 12MMA: +0.6% and 3MMA: -2.2%YoY.     

Our comments: Retail sales, volumes, surprised in December +0.6%YoY, barely positive after a negative figure in November -1.1%YoY. The profile was the same as we used to;  Non Food +4.4%YoY (car sales +17%YoY) and Food -3.4%YoY. The economy remains resilient and clearly surprising on the upside. Despite several increases on mortgage interest rates, non-food sales remain positive, while food sales remain negative. The base effect, should help Food sales from January onwards, while Non Food sales have a tough base effect until April/23.

Summing up, Non-Food real sales surprised in December +4.4%YoY, after a smaller figure in November and was enough to show positive Retail sales +0.6%YoY; as Food sales remain in negative territory (-3.4%YoY). The Portuguese economy is surprising on the upside, showing a strong resilience, after several increase on mortgage interest rates, in fact VAT revenues in December +10%; was already a signal retail sales were outperforming. Nevertheless, the base effect is not helping the non-food retail sales until April/May, while in term of Food, figures should improve, mainly due to the base effect.

Source: INE, Eurostat, AS Independent Research