Latvian retail sales fell a calendar-adjusted 1.8% y/y in March after expanding 5% y/y the preceding month, data from the Central Statistical Bureau (CSB) showed on April 29.

The contraction in March owes to the lockdown imposed by the government earlier that month to fight the outbreak of coronavirus (COVID-19). The pandemic is expected to hit domestic demand heavily and, therefore, depress Latvia’s economic growth in 2020.

Due to the outbreak, Latvia’s economy is now expected to shrink 10% or even more in 2020, according to the latest estimate from the Bank of Latvia. GDP expanded 2.2% in 2019.

Broken down by category and in calendar-adjusted terms, sales of non-food products declined 8.3% y/y in March, compared with an expansion of 8.2% y/y in February. That is clearly an effect of the lockdown that affected non-essential retail.

In contrast, demand for food shot up with turnover expanding 7.1% y/y in March following a gain of 3% y/y the preceding month.

In the non-food sector, eight out of ten segments recorded y/y turnover declines in March. Sales of clothing, footwear, and leather goods predictably collapsed 45.6% in annual terms in the third month. 

The only two non-food segments that recorded growth were pharmaceutical and medical goods, where turnover increased 26.8% y/y in March and sales of electrical household appliances in specialised stores with an expansion of 15.5% y/y.

Sales of automotive fuels declined 3.3% y/y in March, following a gain of 0.9% y/y in the second month, CSB data also showed.

In monthly terms, sales retreated a seasonally adjusted 5.9% in March, compared to growth of 3.5% m/m in February.