Germany’s Retail Sales Unexpectedly Declined in June

Photographer: Krisztian Bocsi/Bloomberg

Tourists and the New Town Hall are seen reflected in the window of a retail store in Munich. Close

Tourists and the New Town Hall are seen reflected in the window of a retail store in Munich.

Close
Open
Photographer: Krisztian Bocsi/Bloomberg

Tourists and the New Town Hall are seen reflected in the window of a retail store in Munich.

German retail sales (GRFRIAMM) unexpectedly declined in June, suggesting that doubts about Europe’s economic recovery weighed on consumer spending.

Sales adjusted for inflation and seasonal swings dropped 1.5 percent from May, when they rose 0.7 percent, the Federal Statistics Office in Wiesbaden said today. Economists predicted an increase of 0.2 percent, according to the median of 25 estimates in a Bloomberg News survey. Sales fell 2.8 percent from a year earlier.

Factory orders, industrial production and exports all declined in May. At the same time, the Ifo index of German business confidence rose for a third month in July and GfK SE (GFK) said consumer confidence will climb to the highest level in almost six years in August. The Bundesbank said last week that economic growth will slow this quarter after a strong expansion in the three months through June.

“The second quarter is dominated by catch-up effects after a weak start into the year,” said Christian Lips, an economist at NordLB in Hanover. “Growth will slow down a bit for the rest of the year but the economy will definitely expand and Germany will remain the growth engine for Europe.”

Gross domestic product increased 0.1 percent in the first quarter after a 0.7 percent contraction in the final three months of last year. The Federal Statistics Office will publish its initial estimate for the second quarter on Aug. 14.

The Frankfurt-based Bundesbank last month cut its 2013 growth forecast for Germany to 0.3 percent from 0.4 percent and its outlook for next year to 1.5 percent from 1.9 percent. The European Central Bank estimates that the 17-nation euro-area economy will contract 0.6 percent this year and expand 1.1 percent in 2014.

To contact the reporter on this story: Stefan Riecher in Frankfurt at sriecher@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.