Latvian retail sales continue losing growth pace in July

Latvian retail sales continue losing growth pace in July
By bne IntelliNews August 30, 2018

Latvian retail sales grew a calendar-adjusted 4.3% y/y in July, slowing down the annual growth rate by 1.3pp in comparison to June, data from the Central Statistical Bureau (CSB) showed on August 30.

Sales in July slowed down growth for a second consecutive month but still recorded the 32nd consecutive month of expansion, a positive sign for the economy as a whole. The Latvian GDP growth came in at unadjusted 5.1% y/y (4.2% y/y in seasonally and calendar-adjusted terms) in the second quarter, the CSB said on July 30. Detailed data on economic growth in April-June are due on August 31.

Real incomes are expected to continue to rise in Latvia, in turn pushing up retail sales, as the labour market continues to tighten. Gross monthly wages in Latvia grew 8.6% in 2017 - compared to an expansion of just 5% in 2016 - and 8.4% y/y in the second quarter.

In monthly terms, sales fell seasonally adjusted 0.1% in July, compared to a fall of 1% m/m the preceding month.

Sales of non-food products increased 3% y/y in the seventh month, compared to an expansion of 5% y/y in June. Food sales gained 5.1% y/y in July against an annual growth of 6.4% in the preceding month.

In the non-food sector, the leading segment was pharmaceutical and medical goods, where sales increased 12.4% on the year. Sales of hardware, paints and glass grew 11.9% y/y.

Sales in three segments - out of total nine - fell in annual terms in July, led by the fall of 15.2% y/y in sales on stalls or markets, followed by a fall of 6.2% y/y sales of clothing, footwear, and leather goods.