German retail sales after unexpected decline in December amid rising prices |
BERLIN, 31 January (Reuters) – The Christmas shopping season is in full swing inflation and German retail sales unexpectedly fell in December as the energy crisis revived fears of a sharper slowdown in Europe’s largest economy.
Retail sales fell 5.3% in December compared to the previous month, the Federal Statistics Office reported on Tuesday. Analysts polled by Reuters had forecast a 0.2% rise in price-adjusted terms.
“The sharp decline in retail sales showed that even solid labour the market is so high inflation and uncertainty cannot prevent private consumption from falling,” said Carsten Brzeski, ING’s global head of macro.
Retail sales also fell by 6.4% in real terms in December compared to a year ago, according to the statistics office.
“Retailers in German city centers missed the big rush just before Christmas,” said Thomas Gitzel, chief economist at VP Bank.
A one-off payment to households in December as part of the government’s measures to tackle rising energy bills helped slow adjusted inflation to 9.6% that month, but appeared to do little to stimulate consumer spending.
“The much-cited welfare loss is reflected in, among other things, weaker consumption. With little change in these underlying dynamics yet, private consumption will continue to be weak,” Gitzel said, adding that it will worsen. on economic productivity this quarter.
According to preliminary results for the year, retail sales increased by 7.8% in nominal terms compared to a year ago. According to the statistics office, inflation taken into account, they decreased by 0.6%.
“Low consumer sentiment led to a collapse in consumption,” said Alexander Krueger, chief economist at Hauck Aufhaeuser Lampe Privatbank. “The recession is extremely severe and high inflation has become a consumption killer.”
Germany’s retail association HDE expects nominal income growth of 2%, but a 3% decline in real terms in 2023.
“The retail sector is holding up well in 2023 despite challenging conditions, but it is losing some ground,” HDE president Alexander von Preen said in a forecast presentation on Tuesday.
According to the HDE survey, half of the retailers surveyed consider their current situation satisfactory, while a quarter consider it bad.
Meanwhile, fewer German companies were planning price increases in the next three months, the Ifo economic institute said, based on a recent survey, but price expectations in consumer-related businesses remained high and declined at a slower pace.
Reporting by Friederike Heine, Rachel More and Rene Wagner; Written by Maria Martinez; Edited by Miranda Murray and Arun Koyyur
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2023-01-31 15:59:33
Source – reuters
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