Estonia: Retailers expect lower sales in H1/2024 after VAT hike

Retailers in Estonia expect declining sales in the first half of 2024 amid lower consumer confidence, ERR reports. Many consumers plan to go shopping in neighbouring countries due to the rise in the VAT rate from 20% to 22% as of 1 January 2024, according to a Norstat poll for Citadele bank, BNS reports. The survey showed that around 41% of respondents who had thought about such an option did plan to go on shopping trips to either Latvia or Finland because of the VAT hike. ERR reported that not all supermarkets in Estonia have raised their prices despite the VAT rise, and that price hikes have been selective. Total retail trade fell by 8% in January-November 2023, compared to a year earlier, according to data from Statistics Estonia.