Looking back at the first four months of 2012, it is clear that after a very steep trade volume increase in the beginning of the year, the months after that marked a worsening – changes in March may have been positive, but those were largely non-existent on the background of falls of February and April.

This dynamic index was also evident in the general traders’ and consumers’ mood that showed notable signs of worsening in the last months, Bank of Latvia Economist Agnese Bicevska comments the retail trade turnover data from the Central Statistical Bureau of Latvia.

On Wednesday May 30 the European Commission published May mood indexes, without any enthusiasm that the trade industry would see better days in the nearest future. Trader mood indicator deteriorated by 4% in May. Population mood improved by 0.1%, but it is against the drop in the previous two months. Population mood changes and the desire to either spend or save up money are not detached from the developments in the national economy. The mood is largely affected by developments in both Latvia as in the global economy.

Seeing as though the government made decision that are directed toward decreasing the tax burden on the population, the mood indicator and trade volume could expect a gradual increasing tendency – there is no point is expecting a huge explosion. It should be added that this can shake short term trade data, motivating the population to put off long term purchases to a moment when VAT rate is reduced, i.e. after July 1. This tactic might not be too relevant for consumer goods, because savings are not as large and the purchase of these goods (especially food) in some extent can be postponed for later.

On the other hand, rainy clouds are already gathering over Southern European states. Until now, it was possible for us to fix the roof of the house and strengthen its foundations, which allowed us to hide from the global storm in it. Although, it is unlikely that any builder would be ready to guarantee that there will be no hole in the roof and that the storm does not become even fiercer.

Retail trade in April (at constant prices, excluding seasonal effects), compared with March, reduced by 2.1%, non-food good turnover reduced by 2.8% and food goods – by 0.7%. In annual terms, i.e. compared with April last year, total retail trade turnover remained at a relatively high growth – 7.8%.

Ref: 102.109.109.1415