Prospect assessment supports changes in expenditure and deposits, fostering trade

The retail turnover published a month ago, indicating a 4% rise in January over December, was a pleasant piece of news to be followed by a moderate drop in February (0.9%), with the December indicator remaining the lowest in prices comparable to the seasonally  adjusted sales level.

The positive changes in retail trade since January have been primarily determined by changes in population's behaviour: with a more positive assessment of the future economic development and own income, expenditure has been limited less and proportionally less has been put aside for a "rainy day"; nevertheless, the high and still rising unemployment level continues to have a pronounced limiting effect on private consumption.

From the yearly perspective, the sales volumes are still lower than a year ago: year-on-year, the retail turnover dropped 13.3% in February. Because of the base, however, this negative indicator has been on a very steep decline, if we remember that in 2009 the drop was on average 30-35% every month.

The March operational indicators give rise to hope regarding future development.

1. Positive changes are still demonstrated by the consumer mood index, which has improved in March an additional six points over February; over December the growth has reached 20 points.

2. A pronounced improvement is also observed in the results of retail business surveys. The financial results of each business, however, to a large extent depend on the relevant goods segment (e.g. a weak demand obtains for long-use and luxury goods) as well as on the optimization measures taken and marketing activities pursued.

3. The revenues from excise and value-added taxes are relatively stable in March.

APA: Rutkovska, A. (2022, 27. may.). Prospect assessment supports changes in expenditure and deposits, fostering trade. Taken from https://www.macroeconomics.lv/node/2467
MLA: Rutkovska, Agnese. "Prospect assessment supports changes in expenditure and deposits, fostering trade" www.macroeconomics.lv. Tīmeklis. 27.05.2022. <https://www.macroeconomics.lv/node/2467>.

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