“The fact that sales of goods in stores decreased by only 0.6% year-on-year in May is good news. Food sales even increased, which is due to the fact that at that time, it is very likely that more people stayed in Latvia than usual this month, and “The result of May would seem a very optimistic forecast a few months ago, but Latvia has coped very well with the first coronavirus attack, and the economic recovery can be seen in operational mobility data as well as on the streets and in car parks,” explained Strautiņš.
–
On a monthly basis, sales grew by 7.8%, but non-food turnover even by 13.4%. Unfortunately, this does not mean that the situation in trade and domestic consumption has completely returned to normal, because the world as a whole is not coping with the pandemic, and it will continue to “cool” the Latvian economy through weaker export performance, Strautiņš pointed out.
–
He stressed that the results of non-food trade in May were formed by a clash of strong opposing forces. On the one hand, unemployment is much higher than at the beginning of the year or in May last year, people’s confidence in the future of the country’s economy is weaker. Restrictions and fears of infection, on the other hand, led people to postpone store visits in March and April, but they did so in May and continue to do so now.
–
“In June and July, the fact that some people who are abroad at other times during this year are in Latvia and spend money here will also provide additional benefits to the store business. People travel more to their homeland, in May fuel trade grew by 3.3% year – on – year in real terms, which was definitely facilitated by low prices, “Strautiņš said.
–
The biggest increase of 25% in May was in the sale of electrical goods, which is also definitely related to extra time spent at home and money not spent on other purposes, which helps to make decisions about increasing personal comfort, the economist explained. Internet sales also grew – by 16.5%.
–
“At least at the beginning of the summer, trade results will be good, year-on-year growth is very likely. Mobility data also show this possibility. It will be much more difficult to improve exports, as the virus crisis in our export markets is greater than in Latvia. “The ESI index in Latvia and the Baltics is one of the highest among the EU countries. This also makes the retail outlook more uncertain in August and in the coming months,” explained Strautiņš.
–
He stressed that economic growth this year will be strongly dependent on domestic consumption. Retail sales during this period have also fluctuated sharply elsewhere in Europe and the United States, but in general remain much further from last year’s level than in Latvia. For example, U.S. retail sales rose 17.7% in May after declining 14.7% a month earlier. However, the annual decline was still much larger than in Latvia or 6.1%. In Spain, there was even a year-on-year decline of 19% in May, even despite a 19.3% month-on-month increase.
— .
