Estonian retail sales grew 4% y/y in 2016, according to preliminary data released by Statistics Estonia on January 31.
The reading shows the effect of the high base. The growth rate halved last year in comparison to an expansion of 8% in 2015. In annual terms in December, turnover swelled 3%, slowing from 7% the previous month.
Still, in annual terms, retail sales have now grown each and every month since June 2013, only infrequently falling below a 5% threshold, fuelled by consumption that is being driven by rising wages and low inflation. Alongside fast growth in industrial output, that should offer momentum for GDP growth in the coming quarters.
GDP growth remained subdued in the third quarter, pushing to just 1.3% y/y. The 1.7% expansion in the first quarter remains the best the small and open economy came up with in 2016 out of reports thus far. GDP data for the final three months of 2016 will be released on February 28.
The annual growth in December's retail sales came on the back of a 9% expansion in sales of manufactured goods. All other sectors of goods showed growth as well, including an expansion of 12% in stores selling pharmaceutical goods and cosmetics, and sales via mail order or the internet booming 31%. Food sales did not change in annual terms in December.