Eurozone retail sales grew only marginally in June suggesting that the economy gained only a limited support from consumer spending in the second quarter.
Sales edged up 0.1 percent on a monthly basis, following a 0.8 percent gain in May, Eurostat reported Friday. However, the June increase was in contrast to a 0.1 percent fall forecast by economists. Retail sales increased for the second straight month.
Annually, retail sales slipped 1.2 percent in June, bigger than the 0.8 percent drop logged in May. Economists had forecast a 1.9 percent drop for June. Sale of food products dipped 1 percent and non-food sales were down 1.4 percent.
In the EU27, retail sales declined 0.3 percent month-on-month and dropped by 0.7 percent from last year.
Total retail trade declined in eight EU countries, rose in twelve and remained stable in Austria. The largest decreases were observed in Portugal, Spain and Malta. The nations with highest increases were Estonia, Latvia, Luxembourg and Romania.
The prospects for consumer spending in the Eurozone look troubling in the near term given the fragile consumer confidence, high unemployment, generally muted wage growth and tightening fiscal policy in many countries, IHS Global Insight Economist Howard Archer said.
The International Monetary Fund projects the Eurozone economy to shrink 0.3 percent this year. The lender cut the 2013 growth estimate to 0.7 percent from 0.9 percent.
The European Central Bank left its key rate at a record low 0.75 percent on Thursday. ECB President Mario Draghi did not announce any major measures yesterday, but he assured that policymakers will consider undertaking further non-standard measures.
by RTT Staff Writer
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