German retail sales plunge by 2.1 percent in March

29th April 2011, Comments 0 comments

German retail sales plunged by 2.1 percent in March from the previous month, provisional price-adjusted data showed Friday as shoppers grappled with rising prices in Europe's largest economy.

On an annualised basis, retail sales fell by an even stronger 3.5 percent, the national statistics office added.

Analysts polled by Dow Jones Newswires had expected a month-on-month decline of just 0.4 percent in March.

Monthly retail sales had fallen by 0.4 percent in February, according to final figures that were revised slightly lower by the Destatis office from its initial estimation of minus 0.3 percent.

The picture was only a bit brighter in nominal terms, with Destatis reporting a monthly decline of 1.8 percent in March and an annualised drop of 2.0 percent.

Economists and the German government have been forecasting a pick-up in consumption as the employment picture brightens, to provide a second pillar of growth alongside German exports.

On Thursday, the Federal Labour Agency reported that unemployment had dropped slightly in April and was hovering around the lowest level in about two decades at 7.1 percent of the workforce.

But a rebound in economic activity and ultra-low interest rates have seen inflation pick up sharply this year in Germany, hitting 2.4 percent this month according to official data released on Wednesday.

That is well above the European Central Bank's target of 2.0 percent.

Berlin expects the economy to grow by 2.6 percent this year, one of the strongest rates in the 17-nation eurozone, as German exporters benefit from gowth in emerging economies.

© 2011 AFP

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