ECO ECONOMY-Polish retail sales growth slows, fueling recession fears

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July 21 (Reuters)Polish retail sales rose more slowly than expected in June, data from the statistics office showed on Thursday, as soaring inflation weighed on what had been the main driver of economic growth in recent years.

Retail sales rose 3.2% year-on-year in June. Analysts polled by Reuters had expected a 5.7% rise.

The biggest economy in the east of the European Union is facing 25-year highs in inflation as well as fears of a slowdown that some economists say could tip the country into recession.

“This obviously suggests that private consumption is going to slow down…the second half of this year will be bad in terms of economic growth, it’s very likely that we’re going into or very close to a recession,” said Marcin Luzinski, economist at Sandanter Bank Poland.

Fuel sales fell 12.6% and motor vehicle and parts sales fell 10.5%. Sales of furniture, appliances and electronics fell 7.0%.

“There is every indication that rising prices and deteriorating economic prospects are affecting the purchasing decisions of consumers who are forgoing larger purchases,” Luzinski said.

(Reporting by Anna Banacka and Patrycja Zaras in Gdansk, Anna Wlodarczak-Semczuk in Warsaw, Writing by Alan Charlish; Editing by Hugh Lawson)

((gdansk.newsroom@thomsonreuters.com; +48 58 769 66 00;))

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