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German retail sales begin 2016 on bright note

[BERLIN] German retail sales grew in January, supporting expectations that private consumption will drive growth in Europe's largest economy this year as its traditional exports engine slows.

Retail sales grew by 0.7 per cent on the month, the Federal Statistics Office said on Monday. Economists polled by Reuters had expected a month-on-month rise of 0.2 per cent.

"This was a solid start to the year for retail sales," said Holger Sandte, economist at Nordea.

"The conditions for consumption are still good and should remain so."

Mr Sandte added that a slowdown in emerging markets would have little impact on German consumers.

Germany is spending billions of euros on housing, finding work for a record number of refugees fleeing conflicts and poverty in the Middle East and elsewhere. At the same time, record-high employment, rising wages, low inflation, and cheaper gasoline have boosted private spending.

On the year, retail sales, a notoriously volatile indicator often subject to revision, fell by 0.8 per cent.