Lithuanian retail sales grew an unadjusted 5.5% y/y in February, according to data released by Statistics Lithuania on March 28.
The reading marks a slowdown on the 9.8% expansion seen the previous month, but is nonetheless robust and keeps shop turnover firmly on the growth track that began in 2015.
Sales grew 7.6% on the year on a working-day adjusted basis, slightly slower than the 8.5% growth in January. Month to month, sales fell an adjusted 0.4%, while recording a fall of as much as 6.1% in unadjusted terms.
As has been the case for months, an improving labour market and growing income are driving turnover. Consumption is a major plank in maintaining economic growth as Lithuania pushes to find new export markets to replace weakened sales to Russia.
Consumption's persistence may offer just enough momentum to put the economy on a stronger path. Economic expansion came in at 2.2% in 2016, with growth rising to 3% in the final quarter, driven by household consumption.
Lithuanian GDP is likely to grow 2.9% in 2017, with momentum aided by the return of investment projects co-financed by the EU, the European Commission noted in mid-February. However, the rebound in investment is set to compensate a likely slowdown in consumption growth, the EU executive predicts.
Headline annual growth in shop turnover was largely driven by the sale of motor fuels, which expanded 20.8% on unadjusted basis, while sales of food, alcoholic beverages and tobacco products declined 0.2%. Most retail segments recorded growth in unadjusted annual terms in February, with turnover falling 2.1% in the “non-specialised stores.”