In May, retail turnover picked up again
The retail turnover in May recovered what it lost in the previous month, (seasonally adjusted data at constant prices) rising 2.1% month-on-month, including 3.1% month-on-month in food product retail businesses. Year-on-year the total retail turnover has still grown rather rapidly, at 7.4%.
Just a few days ago, almost all surveys and operational statistical data pointed to an increasing caution among the population, a dropping demand and rather pessimistic outlook on developments in both domestic and foreign economies. This overall grim mood was augmented by the various surveys of public opinion that indicated that many view the crisis as having been overcome ineptly, that close to half of the population pines for the "good old" Soviet times and have no confidence in the European Union alongside data reflecting the financial savvy of the population, which is quite unremarkable. The overall manifestation of pessimism was topped by the fact – seemingly known to all yet stressed once again – Latvia is the third poorest country in the European Union.
After all this gloom and doom, the confidence indicators published yesterday by the European Commission came as a pleasant shock: it turns out that Latvia is home to the most optimistic entrepreneurs and general population in the Europe. Latvia's Economic Sentiment indicator improved by 2.3 points in May, reaching 104.6. Estonia is second (102.9), followed by Sweden (101.5), Germany (100.5), and Lithuania (100.3). The above countries are the ones that form a tight circle of optimists. What is important here is not only Latvia's leading position at the top of the list but also the list of optimistically minded countries itself, pointing to a rather stable and positive evaluation in our main trading partners. A stable domestic demand in the countries with the most buyers of our products is crucial for the Latvian export dynamics, creation of new jobs and improvement in the well-being of the population.
Examining the overall mood thoroughly, we find that in June the improvement is more or less across the board: both manufacturers and service providers have a more optimistic view of the developments. It is, however, the evaluations by consumers and merchants that deserve a special mention: the consumer confidence indicator has improved by 7.6 points, with the Retail trade confidence indicator going up 6.3 points. Thus we have reason to look forward to the June sales data to be published in a month.
To conclude: even though we continue following many developments with concern and suspicion, stubbornly refusing to discern any good news, it is nevertheless there. Employment is up. Export performance is better than could have been hoped against the background of grim global developments. Domestic consumption has picked up and investment is at a very respectable level. We are the leading economy in Europe both in terms of optimism and economic growth. That does not conclude the list of good news, yet it is not the number of such news items that will convince us that we can. To quote a Latvian classic: "Our problem is that we never know where our inability ends and our unwillingness begins."