German September retail sales rise, supporting consumption-led growth

[BERLIN] German retail sales rose slightly less than expected on the month in September and posted a big increase on the year, data showed on Monday, adding to signs that consumption will continue to support growth this year.

The volatile indicator, which is often subject to revision, showed retail sales in Europe's largest economy rose by 0.5 per cent on the month in real terms, the Federal Statistics Office said.

That compared with the Reuters consensus forecast for a 0.7 per cent rise.

On the year, retail sales jumped by 4.1 per cent, overshooting a Reuters consensus forecast for an increase of 3 per cent.

Traditionally thrifty Germans have helped private consumption displace exports as the main driver of growth thanks to record-high employment, increased job security, rising real wages and ultra-low borrowing costs.

The retail sales data came after a GfK survey published on Thursday showed the cheerful mood among German shoppers clouding unexpectedly heading into November.

But the outlook for the economy remains bright overall, with leading economic institutes last month hiking their growth forecasts for this year and next to 1.9 per cent and 2 per cent respectively.

REUTERS