Euro-Area Retail Sales Decline, Led by Weakness in France
Sales in the 17-nation currency bloc decreased 0.3 percent from January, when they rose a revised 0.9 percent, the European Union’s statistics office in Luxembourg said today. Economists had forecast a decline of 0.4 percent, according to the median of 20 estimates in a Bloomberg News survey. From a year earlier, February sales fell 1.4 percent.
With Europe struggling to shake off the sovereign-debt crisis and pull out of a recession, European Central Bank President Mario Draghi said yesterday that the ECB is “ready to act” if the economy deteriorates further. The euro-area services industry contracted the most in five months in March, data showed yesterday.
“Weak economic activity has extended into the early part of the year and a gradual recovery is projected for the second half,” Draghi told a press conference in Frankfurt yesterday after the central bank kept its key interest rate at a record low of 0.75 percent. The outlook “remains subject to downside risks, including even weaker-than-expected domestic demand,” he said.
The ECB last month cut its economic outlook and now projects a contraction of 0.5 percent in euro-area gross domestic product this year. That would mark the first back-to- back annual GDP declines since the euro’s debut in 1999.
The euro weakened to a four-month low against the U.S. dollar last week amid concerns about the international bailout for Cyprus. The European currency, which dropped as low as $1.2751 on March 27, the weakest since Nov. 21, was at $1.2922 at 10:40 a.m. in Brussels, down 0.1 percent on the day.
Retail sales in France, the second-biggest euro-area economy, dropped 2.2 percent in February from the prior month after a 0.2 percent gain in January, today’s report showed. Sales in Finland declined 0.8 percent after a 0.3 percent gain in the previous month.
In Germany, Europe’s largest economy, February sales rose 0.4 percent after a 3 percent jump in January, according to today’s data. Spain reported a 0.6 percent increase for the latest month.
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