Estonian retail sales grew just 1% y/y in February, according to data released by Statistics Estonia on March 31.
The result shows growth in the sector losing pace for a third month in a row. However, retail sales have now grown each and every month since June 2013, only occasionally falling below 5%.
The expansion continues to be fuelled by a tight labour market. Alongside fast growth in industrial output, that should offer momentum for GDP growth in the coming quarters.
GDP grew 1.6% in 2016, improving on the six-year low of 1.1% seen in the preceding year. Estonia's GDP is predicted to expand 2.2% in 2017, according to the European Commission. Swedbank offers the same forecast, but is more optimistic than Brussels about growth in 2018, which it sees at 2.8%, 0.1pp above the estimate of the EU executive.
In monthly terms, retail sales fell 9% in February. The annual growth came on the back of a 3% expansion in sales of manufactured goods. Most other segments showed growth as well, including an expansion of 7% in stores selling household goods and appliances, hardware and building materials.
Sales of textiles, clothing and footwear saw turnover grow 4%. Sales via mail order or the internet expanded 39%. Sales of automotive fuel grew 7%.
On the negative side, sales decreased in the segment of pharmaceutical goods and cosmetics, innspecialized stores, and in non-specialized stores selling industrial goods.
Food sales contracted 2% y/y in February, an effect of the high base and accelerating inflation of food prices, Statistics Estonia notes.