BERLIN: Thanks to a favorable economic situation, German retailers were expected to see a significant increase of revenues in 2015, said German federal statistics office Destatis on Thursday, suggesting a key role that private consumption played in driving Europe’s biggest economy.
The statistics office estimated that retail sales in Germany last year were between 2.8 percent and 3.1 percent larger than in 2014 when deducting price increasing effects.
Compared to an annual sales growth of 1.6 percent in 2014, the figure in 2015 was significantly inspiring.
Destatis said its estimation was based on data for the first 11 months of 2015 when retail sales went up by 2.8 percent in real terms, the highest annual increase since 1994.
Germany currently enjoys the best labour market situation in its history. Its jobless rate was anchored at a record low level and less than half of the European Union average.
Without concerns about losing their jobs and with an expectation of rising wages, Germans were more willing than those from other European countries to make purchases. Falling energy prices freed up more money for consumption, while historically-low interest rates suppressed Germans’ propensity to save.
“Both economic and income expectations are significantly on the up. Propensity to buy confirms its extremely high level with almost no change,” said German research institute GfK in a recent report.
It expected private consumption to remain dynamic in 2016 and domestic demand to continue driving the economy as it did in past years.
HDE, German retailers’ association, estimated that retail sales grew by 2.7 percent in nominal terms in 2015 to 471 billion euros (about 511.4 billion U.S. dollars). Its president Josef Sanktjohanser hinted recently that the sales in 2016 would continue to grow by more than 2 percent.
“The labor market data are good, real incomes are rising and the price increases are moderate,” Sanktjohanser said.
In the past two months alone, when Germans rushed into stores for holiday goods and gifts, retail sales increased by 2 percent to 86.7 billion euros, according to HDE estimation.