Euro zone retail sales stable in December

Euro zone retail sales were flat in December despite it traditionally being one of the busiest months of the year, figures showed yesterday, suggesting consumer demand remains weak and economic recovery fragile.

On a year-on-year basis, European Union statistics agency Eurostat said retail trade fell 1.6 per cent across the 16-country euro area in December. Economists polled by Reuters had expected a 0.4 per cent monthly increase and a 2.5 per cent year-on-year fall.

The data suggests consumer demand, normally strong in the Christmas season, is unlikely to have contributed much to an expected recovery in economic growth in the fourth quarter. Eurostat revised its November retail trade figure to -0.5 per cent month-on-month from a previous -1.2 per cent. The annual index was revised to -2.0 per cent from -4.0 per cent.

Economists say people are likely to keep spending tight because of growing unemployment, which rose to 10 per cent in the euro zone workforce in December, the highest rate since August 1998.

GDP growth will likely depend on government spending as tens of billions of euros are pumped into the economy to stimulate demand, and on companies replenishing their inventories.

In a breakdown, Eurostat said euro zone retail sales of food, drinks and tobacco increased 0.3 per cent month-on-month in December while non-food products fell 0.2 per cent.

Among countries that have reported figures, the biggest monthly increases in sales were in Austria, France, Spain, Slovenia and Slovakia.

Keep up with the latest business news from the region with the Emirates Business 24|7 daily newsletter. To subscribe to the newsletter, please click here.

Follow Emirates 24|7 on Google News.