Euro zone retail sales fall more than expected in March
FRANKFURT – Retail sales in the euro zone fell more than expected in March, Eurostat said on Friday, as rapid inflation and rising interest rates ate deep into disposable incomes to limit households’ purchasing power.
Retail sales volumes in the 20 nations sharing the euro currency fell by 1.2 percent in March from the previous month, outpacing the 0.1- percent drop seen in a Reuters poll of economists.
Consumption has been weak all year as real incomes fall and households are now spending a larger part of their incomes on expensive energy, eroding demand for others goods.
Higher interest rates have also pushed up debt service costs and households have increased their savings, both because of higher rates and also out of precaution as the bloc’s economy has been skirting a recession for several quarters now.
Food sales fell by 1.4 percent from the previous month but car fuel sales jumped 1.6 percent, partly on lower retail prices.
With a 2.4- percent drop, Germany saw the biggest decline among the euro zone’s largest countries, while Latvia saw the biggest overall fall, of 2.7 percent.
Compared to a year earlier, euro zone retail sales volumes fell by 3.8 percent in March.
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