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Commentary on Retail Sales Data of August 2009
30 September 2009
The retail turnover in comparable prices diminished by 3.3%
over July,
contrasting with the positive assessment of new opportunities in
Latvian and external markets made by representatives of several
industries, food and wood pulp in particular, citing a more attractive
pricing policies and improvements in population and entrepreneur mood
indices. The results indicate that the first signs of
economic stabilization are still very fragile.
The downturn in retail turnover was mainly determined by the drop in
demand for nonexpendable goods with the demand for food items remaining
at the previous level. Car sales, which are accounted for separately
from retail turnover, indicated a 6.5% rise in August.
The improvement in retail data is expected to be gradual and uneven
from month to month, diminishing with the amendments to budget
expenditure and growing as the consumer and enterprise mood improves.
To bring about a faster recovery of the economy, including a renewal of
trade along with the optimization of the state administration we should
not forget about stimulating the economy, using the EU funding in a
more purposeful way and easing the bureaucratic burden.
Of essence is also a speedy development of the 2010 budget, which is
necessary not only to balance state expenditure and income but also to
restore investor and lender confidence. Should confidence in the
state’s ability to discharge its liabilities and observe consistent
government policies decline, it will create an additional pressure on
the cost of necessary financing both for the public and private
sectors.
Agnese Bicevska,
Bank of Latvia expert
