German retail sales slip in December, statistics show

31st January 2011, Comments 0 comments

German retail sales slipped by 0.3 percent in December from the previous month, figures released on Monday by the national statistics service showed, but gained by 1.2 percent for 2010 as a whole.

The provisional monthly drop at the end of the year was much better than a slump of 1.9 percent recorded in November, the Destatis office figures showed, but completely missed a forecast increase of 2.0 percent compiled by Dow Jones Newswires.

Germany, which has the biggest European economy, has traditionally relied on exports for growth, but lower unemployment and stronger wages have helped boost consumption and economists forecast it will help underpin activity this year.

"After today's numbers it might sound like a whistling in the dark, but with increasing wages, dropping unemployment and pent-up demand, private consumption should become an important growth driver this year," ING senior economist Carsten Brzeski said.

Inflation has picked up meanwhile, reaching a two-year high of 1.9 percent in January according to Destatis data, but the government still expects growth of 2.3 percent this year, following a record post-reunification rate of 3.6 percent in 2010.

Consumption is forecast to increase by 1.6 percent this year at constant prices, which would be much better than the annual average of 0.4 percent over the past decade.

© 2011 AFP

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