Latvian retail sales grew a seasonally adjusted 2.3% y/y in January, slowing a little from the 3% expansion in January, data from the Central Statistical Bureau (CSB) showed on March 30.
The expansion was the third in a row, after a surprise contraction in November. In monthly terms, sales increased an adjusted 0.1%. Still, the continued expansion offers hope that consumption will remain a major driver of economic growth this year.
Driven by a tightening labour market and low inflation, Latvian household consumption helped prop up growth in 2015, as problems in Russia and the stuttering recovery in the EU limited export growth. That said, 2016 is yet to see retail sales expand at the same sort of rate seen before the November contraction.
The annual growth in February was driven by a 22.5% expansion in sales of information and communication equipment in specialised stores, followed by 16.4% annual growth in sales of cultural and recreation goods. Overall, sales of non-food products increased 1.4% on the year, while sales of food grew 3.7%.
With real incomes set to keep growing, retail sales look set for a good year. The average gross monthly wage in Latvia grew 7.4% y/y in the fourth quarter and 6.8% y/y across the whole of 2015, according to data from the CSB published on February 26.