- Christian Schulz of Berenberg
German retail sales increased faster than expected in April, adding to signs private consumption is likely to remain a solid catalyst to economic growth in Europe's number one economy. Retail sales in April rose 1.7% in real adjusted terms compared with March, statistics office Destatis said, yet the indicator is notorious for being highly volatile and prone to large revisions. On an annual basis, retail sales expanded 1.0% in real terms in April, Destatis said. In the first four months of the year, retail sales were up 3.1% compared with a year earlier, according to the statistics office.
Meanwhile, the Euro zone's third biggest economy consumer inflation slightly decelerated its pace of growth on a monthly basis in May but still managed to stay in positive territory, Istat reported. The CPI for May decelerated to 0.2% month-on-month, after a slightly improved reading seen in April, when the gauge rose 0.3%. Market analysts had expected a 0.1% increase in consumer prices. Measured in annual terms, meanwhile, the CPI rose 0.2% in the reported period, after a stagnating reading seen in the previous month. At the same time debt-ridden Greece fell back into recession during the first quarter of the year, data confirmed, as declining business confidence, unhealthy high unemployment, persistent deflation and political uncertainty take a toll on the economy. The Greek economy shrank by 0.2% in the three months through March on a quarterly basis, following a 0.4% contraction in the last quarter.
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