Retail growth: "two steps forward, one back"

The retail turnover in October (in comparable prices, excluding seasonal influence) dropped 1.7% month-on-month, losing the increase in sales volume of September. Albeit both the consumer and trading mood is improving, the development trend of this indicator is uneven and such periodic drops in the trading sector are not unusual.

The mood changes are quite rapid as a result of various events, therefore to predict monthly changes in trade with any accuracy is impossible. October was rich in events what with the national elections, forming of the new government, setting the direction of consolidating the state budget. In November, on the other hand, the focus is on events in the foreign markets, e.g., the financial sector problems in Ireland. To a greater or lesser degree, these events tend to affect the behaviour of the participants in the economy, their expenditures, habits of saving, investments, etc.

Right now we can still predict a slow and uneven trade growth in the future. Compared to the lowest point in sales during the crisis (in December 2009) the retail volume has improved by almost 9% (including automobile sales, by 16%). This same kind of "two steps forward, one step back" dynamic could be maintained in the next few months as well. Of course, expenditures tend to increase at the end of the year and we can safely say that they are likely to be greater than last year's, yet in a seasonally adjusted row of data no great leaps can be expected - at least not before there is more clarity regarding the state budget for 2011 and its influence on the purchasing power of the population. Barring new global turmoil and with export retaining stable growth, a gradual economic recovery will continue domestically slowed somewhat by the expected tax increases.

APA: Rutkovska, A. (2019, 22. feb.). Retail growth: "two steps forward, one back". Taken from https://www.macroeconomics.lv/node/2389
MLA: Rutkovska, Agnese. "Retail growth: "two steps forward, one back"" www.macroeconomics.lv. Tīmeklis. 22.02.2019. <https://www.macroeconomics.lv/node/2389>.

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