Consumer spending has returned to the levels it was a year ago, at least with bankcard payments, according to SEB bank, fueled in part by a rise in spending on entertainment and tourism after a hiatus during the peak of the COVID-19 pandemic.
However, this does not necessarily mean a return to business as usual as it was in July 2019 for many firms, particularly those who depend on foreign tourism.
SEB spokesperson Lennart Kitt said that while the recovery consumer spending in Estonia was definitely a positive sign, it was equally certain that based on this data alone it was too soon to talk about full recovery in the economy.
While in April, consumers in Estonia spent almost 90% less on travel than in April 2019, in July, spending in the sector recovered to the extent that it was 40% lower than a year before, SEB said.
Spending on entertainment stood at 17% lower in July than in the same month last year, while spending in cafes and restaurants actually rose by 1%.
On the eve of the pandemic, there had actually been strong growth in the same sectors.
“In the field of entertainment, spending by residents grew by 24% in February versus February 2019, and the rate of growth in the catering sector in the same period was 17%,” he said.
This was followed by a drop of almost a third to March – the month the government declared an emergency situation in response to the pandemic – and fell by 65% between February and April.
Spending on less necessary products and services, including design, home refurbishment and interiors rose YoY, though slowed down from June to July.
In June this expenditure was 20% higher, but by July the rate of growth had fallen to 10% YoY. (ERR/Business World Magazine)