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German retail sales post biggest first-half increase in 20 years
[BERLIN] German retail sales posted their strongest first-half increase in at least 20 years, data showed on Friday, strengthening expectations that private consumption will be a major growth driver for Europe's largest economy this year.
The 2.5 per cent increase in shopping activity in real terms from January to June was the largest increase on record, data from the Federal Statistics Office showed on Friday. An official said it was the highest first-half increase since the office began releasing that data in 1994.
Annual retail sales were also encouraging. Shopping activity soared by 5.1 per cent on an annual basis as Germans spent more on textiles, cosmetics, medicines and other items like books and jewellery.
On a monthly basis, however, retail sales - a notoriously volatile indicator that is often subject to large revisions - dropped by 2.3 per cent in real terms, the data showed. That was the biggest drop since the end of 2013 and was far below the consensus forecast for a 0.3 per cent rise.
Monthly retail figures for May were slightly revised down to a gain of 0.4 per cent from a previously reported rise of 0.5 per cent.
The strong first-half retail sales bode well for household spending, combined with other data showing employment and morale among German shoppers at high levels.
In addition, cheap oil is freeing up some of consumers' cash for other purchases and bigger paychecks also make an increase in private consumption likely.