Latvian retail sales grew a calendar adjusted 3.7% y/y in January, picking up speed from a 2% expansion the previous month, data from the Central Statistical Bureau (CSB) showed on February 28.
The growth in January marked the fourteenth month in a row in which sales expanded. That growth is seen as a positive harbinger for economic growth in 2017; GDP expanded 2% in 2016, a slowdown on 2.7% in 2015.
Growth is predicted to accelerate to 2.8% in 2017, according to the winter economic forecast by the European Commission. In monthly terms retail sales grew a seasonally adjusted 2.4% in January.
The annual growth in the first month of 2017 was driven by a 12.5% growth in sales of clothing, footwear and leather goods and 10.6% growth in sales of information and communication equipment in specialised stores. Overall, sales of non-food products increased 5.9% on the year, while food sales contracted 0.1%.
Real incomes are expected to continue to rise in Latvia, pushing growth of retail sales, even as the expansion of wages weakened last year. The average gross monthly wage in Latvia gained 5% in 2016, compared to 6.8% in 2015. In the fourth quarter, wages grew 5.9% y/y.