Latvian Central Statistics Office (CSB) has the retail sales statistics for December 2007. The sales in December 2007 grew 1.7% compared to December 2006. For most countries, this would be an ordinary number. For Latvia, it's not.
The graph below shows the change compared to 2006, for each month of 2007:
As you see, the first half of 2007 was a consumption boom, with sales growing at almost 30%/year. This boom had been actually going for several years. But the peak of the boom was in early 2007.
Now, we are seeing the boom receding and extremely rapidly. From 24.1%/year growth rate in July to 1.7%/year in December. Thisis probably related to the changes in credit policy of Latvian banks. If the trend continues, we will see a decline in sales in a month or two. And, by summer, it will be a very big decline.
This morning, the prime minister promised to stimulate the economy by more government spending if the slowdown turns out to be too rapid. In half a year, the government has gone from thinking how to slow down the economy to thinking how to stimulate it...
Developing... And I don't like the direction in which it's developing.