retail

After a drop in February, the retail trade turnover in March increased by 2.1% (seasonally adjusted data at constant prices), primarily determined by a rise in demand for foodstuffs (+2.4%) and automobile fuel (+7.8%), with the sales volumes of other non-food goods even dropping slightly (-0.4%). Year-on-year, sales have increased by 8.8% - thus still rather rapidly.

The retail trade turnover at constant prices in February, seasonally adjusted data,dropped by 1.2%. In the commentary for previous month I predicted that in February, after a growth of a couple months, a drop could be expected in February as the Russian guests who spent their Christmas holiday in Latvi

2013 has begun with a rise in the retail turnover. The January retail turnover, seasonally adjusted data at constant prices, rose 1.2% month-on-month. The year-on-year rise was at 5.2%, which is a very high rate of growth compared to the performance of other countries, albeit substantially lower month-on-month because of the higher base (the annual growth rate in December reached 8.4%).

Two mutually opposing factors had an important influence on the January trade results:

The retail trade turnover, according to seasonally adjusted data at constant prices, in December rose by 0.7% month-on- month. Year-on-year, the growth rate has also remained high at 12.5%. Such positive developments at the end of the year reinforced retail growth already observed in the second half of the year, and, compared to 2011, the indicator has reached 9.7%.

The latest retail trade data point to a rise in expenditures, renewing the demand level that had dropped in October. The retail sales turnover, according to seasonally adjusted data at constant prices, grew 1.4% in November. Year-on-year, a high growth rate (8.7%) was retained.

In the third quarter, gross domestic product (hereinafter, GDP) grew 5.2% year-on-year, according to the second estimate by the Central Statistical Bureau. The seasonally adjusted quarter-on-quarter increase was 1.7%. That means that total GDP for 2012 could grow more rapidly than predicted, with growth hovering around 5.0%. By the rate of growth, this places Latvia first among the European Union (EU) countries.

GDP contributors:

The retail turnover data for October 2012 were expected to sketch an approximate dynamics of private consumption (the main GDP component) for the fourth quarter of 2012. Yet this sketch is far from clear. The dynamics of month-on-month and year-on-year retail growth rates point to different conclusions and, similar to previous months, it is too early to confirm a substantial change in trend over the middle term.

Retail trade turnover (at constant prices; seasonally-adjusted) decreased by 0.4% month-on-month in September, thereby reversing the stable growth trend observed in the recent months. In annual terms (over September last year), the growth rate remained high at 7.9% on account of the rise achieved in the previous months: retail trade had followed a steady and quite steep upward path since May 2012. Against the backdrop of such an impressive improvement, this slight deterioration in September is no reason for feeling disappointed.

After two months of growth, retail turnover continued increasing also in August. Month-on-month, it grew 1.0% (seasonal factors excluded). Year-on-year, growth of 10.0% was retained and it should be evaluated as high, because growth continued despite the high base effect. We can thus expect a positive growth in the third quarter laying a good foundation for a positive growth of gross domestic product as well.

The retail turnover in July grew 2.7% month-on-month, and 10.3% year-on-year. The sales volumes thus are still within the two-digit growth zone, which is good from the point of view of economic activity, even though there are a few “buts”.