Latvian retail sales grew a calendar adjusted 1.2% y/y in February, slowing from a 3.7% expansion the previous month, data from the Central Statistical Bureau (CSB) showed on March 30.
The growth in February marked the fifteenth month in a row in which sales expanded. Expanding retail sales are seen as a positive sign for economic growth in 2017. In monthly terms retail sales grew a seasonally adjusted 2.4%.
GDP expanded 2% in 2016, a slowdown on 2.7% in 2015. However, the economic expansion is predicted to accelerate to 2.8% in 2017, according to the winter economic forecast by the European Commission.
Retail sales growth in February was driven by a 13% rise in sales of automotive fuel. Overall, sales of non-food products increased 4.4% on the year, while food sales contracted 1.3%.
Real incomes are expected to continue to rise in Latvia, in turn pushing 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.