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A Happy New Year for Germany

We might only be four days into it but so far 2013 is shaping up quite nicely for Germany.

Yesterday data showed that in December unemployment in the nation rose by 7,000 less than predicted by economists, whilst the seasonally adjusted jobless rate maintained its previous level of 6.9 per cent – close to a two-decade low.

Now, thanks largely to the low unemployment rate, German retail sales are on the up as well.

According to the Wiesbaden-based Federal Statistics Office, sales in November (although down 0.9 per cent from the same period of 2011) increased by 1.2 per cent from October.

In October German retail sales plummeted by 1.3 per cent.

Once again German figures have outperformed the expectations of industry experts. Economists participating in a Bloomberg News survey forecast a gain in retail sales of just 0.8 per cent.

And the good news could be set to continue. At the end of December Germany’s HDE retail association estimated that Christmas-based retail sales could be up 1.5 per cent on the previous year.

However, despite these positive developments in a volatile global economic climate Germany still has a difficult road ahead.

An economist with Standard and Chartered commented: ‘We are cautiously optimistic about German consumption growth this year due to above-inflation wage gains and lower savings [but] we don’t expect a spending boom.’

The statistics report also showed that over the course of 2012 sales, when adjusted for inflation, had fallen by between 0.1 to 0.3 per cent from 2011.


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