Latvian retail sales grew a calendar adjusted 2.8% y/y in April, an increase on the 1.5% expansion recorded the previous month, data from the Central Statistical Bureau (CSB) showed on May 30.
April marked the seventeenth month in a row in which sales expanded. Expanding retail sales are a positive sign for economic growth, although their recent performance is not at the level of achieved in recent years. In monthly terms, retail sales expanded a seasonally adjusted 1.3%.
Latvia’s GDP expanded 2% in 2016, a slowdown from 2.7% in 2015. However, economic growth is predicted to accelerate to 3.2% in 2017, according to the spring economic forecast by the European Commission. The Baltic state will present a flash estimate of GDP growth in the first quarter on May 31.
The annual retail sales growth in April was broad, with just one segment – pharmaceuticals and medical goods – declining. Sales of information and communication equipment in specialised stores grew the fastest, at 21.2% y/y, followed by sales of automotive fuel, which expanded 7.3%. Overall, sales of non-food products increased 4%; food sales gained 1.7%.
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.