Lithuanian retail sales grew at an unadjusted 4.8% y/y in November at constant prices, Statistics Lithuania reported on December 28.

The reading marks the second month in a row in which sales growth picked up speed in annual terms; the growth in November was also the fastest since May. Shop turnover has now remained on an uninterrupted growth track since the start of 2015.

Sales grew 5% on the year on a working-day adjusted basis in November, more than twice faster than the adjusted 2% y/y expansion in October. Month on month, sales grew an adjusted 1.2% in November; in unadjusted terms, there was a monthly fall of 2.2%.

An improving labour market and growing incomes remain drivers of retail turnover in Lithuania. The approaching end-of-year season is likely to improve further the performance of the retail sector.

On the other hand, a slowdown in consumption is likely, according to the European Commission. In terms of economic growth, the rebound in investment is set to compensate for slower turnover experienced by Lithuanian retailers.

Lithuanian GDP is expected to grow 2.9% in 2017 overall – although Fitch forecast a figure of as much as 3.3% in its recent rating update – with the expansion aided by the return of investment projects co-financed by the EU. 

Economic expansion came in at 2.2% in 2016, but growth picked up speed to an adjusted 4.1% y/y in the first quarter and 3.9% y/y in April-June. The third quarter saw the economy expand 3.4% y/y in adjusted terms.

November growth in retail sales owed to food, alcohol, and tobacco sales, which expanded 2% y/y on an unadjusted basis, in contrast to a fall of 1.2% y/y in October.

Sales of non-food items accelerated growth to 6.7% y/y, from 4.4% y/y the previous month; sales growth of automotive fuels also picked up speed, from 4.1% y/y to 6.1% y/y in the eleventh month. In nominal terms, sales came in at €874.8mn in current prices in November.