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Monday 23.10.2017 | Name days: Daina, Dainida, Dainis
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Economists: Latvia's consumers – more optimistic than in neighbouring countries

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUThe latest retail sales data for August coincide with the consumer sentiment, which quite surprisingly keeps growing despite the turmoils in global financial markets and in the U.S, as well as the European Union’s debt crisis and growing uncertainty over the future global economic development, indicate economists at Latvia’s banks.

Swedbank‘s chief economist Lija Strashuna,

Household optimism increase fosters consumption growth (particularly of durable goods). However, the question is how much of this optimistic sentiment is justified.

Large purchase plans have slightly declined; however, the overall Latvian economic assessment, as well as that of households’ financial situation is improving. At the same time, retailers are more cautious and their sentiment has been deteriorating for three consecutive months.

However, household savings rates are still low. There is high unemployment and people are still leaving Latvia to seek jobs abroad. Therefore, most likely, the private demand and retail growth will slow down again already in late 2011.

SEB Bank’s economist Dainis Gashpuitis,

Retail activity has reported a sharp upturn over the past three months. However, the economic growth is still not reflected in household incomes. Yet, the economic situation has eased the uncertainty, improving the sentiment at the level of late 2007.

Also, the savings statistics indicate that residents are spending money, which is partly facilitated by the relatively low deposit yields.

Meanwhile, consumers’ sentiment in the EU has continued to decline since May 2011, with traders having moderate expectations. The German economy has recovered, yet in August retail sales reported a four-year-low. The weak consumption assessment in the EU is a signal for future export prospects, which will sooner or later affect the domestic consumption and sentiment.

It should be noted that Latvian consumers’ sentiment and assessment stands out in the Baltic States. While consumers in Latvia still have positive outlook, Lithuania and Estonia’s consumers are more down to earth. However, in the last quarter of 2011, the mood is likely to become more conservative, with the activity becoming more moderate.

However, this trend might move to early 2011. In this case, the likelihood of negative scenarios is rising. Consumers might be caught off-guard, resulting in sharper consumption fluctuations.

DnB Nord Bank economist Peteris Strautins,

Retail turnover data for August show that Latvia is still a safe harbor in the heavy global economic storms. The Latvian economy will continue to expand, while the European Union (EU) might have already slipped into a recession. I would like to know how much longer we will be able to hold on. Most likely, by the end of 2011. Yet, there is uncertainty over the future.

In terms of the industry’s rock-bottom in December 2009, the total retail turnover (seasonally adjusted data) has grown 17.0%, while falling by 30.3% behind the pre-crisis peak. It is now at the average level of 2005.

However, the turnover could slightly increase in the coming months. The European Commission’s released confidence data show that in September Latvia was one of the four EU countries with improving business and consumer sentiment.

The news portal BNN already reported that in August retail turnover was up 1.6% month-on-month or up 7.4% year-on-year. This is the fourth consecutive month of a fairly rapid growth. Compared to July, non-food product turnover posted an increase, while food product sales fell slightly.


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  1. Leo says:

    they are so optimistic that they leave the country in mass

    Thumb up 0 Thumb down 0

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