German consumers to the rescue

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After robust Spanish GDP numbers, German retail sales record their strongest first-half increase in at least 20 years. Is the euro zone finally on the path to full recovery? David Pollard reports.

German consumers to the rescue

Retail sales data is a volatile indicator, bouncing around from one month to the next.

Which might explain why Germany’s can record – at minus 2.3 per cent – their biggest drop in nearly nine months.

And at the same time show – at plus 2.5 per cent – the biggest half-yearly increase in at least 20 years.

But which to believe?

Panmure Gordon’s David Buik.


”Germany is a very strong economy. There are areas that worry me terribly about the people – in terms of the pensions, they’re getting far too much, the population is getting older and they are going to have problems going forward. But to concern you and I and the rest of the world over the next 3 to 6 months, I think Germany is pretty well placed.”

The numbers bolster the belief that the German consumer is coming to the euro zone’s rescue.

Ready to spend again on record employment levels – and cheap oil.

Spain too showing renewed signs of strength – its output in the second quarter grew by 1 percent.

Even Greece enjoying a mini retail boom – its sales in May were up by 4.2 per cent year on year.

Despite a debt crisis that’s here to stay, says Buik.


”The fact remains, you and I know, that twelve million people – hell has a better chance of freezing over than them being able to service a debt of 320 billion euros, let alone repay it. It cannot happen.”

Cheap energy has been bringing down euro zone inflation.

Latest numbers show a 0.2 per cent annual rate for July.

That’s clearly above the deflation that was feared earlier this year – but still leaves the ECB with a big ask – to push prices up by its target rate of close to 2 per cent.

Tags : Rescue, consumers, german

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