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German retail data indicate growth speeding up

FRANKFURT: German retail sales rose in November while a retail sentiment indicator jumped in December, providing further evidence of accelerating growth in Europe's largest economy.

Retail sales rose 1.0 percent year-on-year in November and were up 0.5 percent in the first 11 months of 1999, the Federal Statistics Office said on Thursday.

Economists polled by Reuters predicted on average a rise of 1.4 percent but analysts said the data were traditionally volatile and of limited value as they excluded car and petrol station sales.

The figures also clashed with seasonally-adjusted retail sales data provided by the Bundesbank which showed declines and which included cars and petrol.

But business daily Handelsblatt said retailers in western Germany were almost euphoric at the end of 1999 according to a jump in the BBE sentiment indicator to 112.25 from 106.3 for west Germany. The pan-German index rose to 107.33 from 101.9.

Lothar Hessler, an economist at HSBC Trinkaus, said the year-on-year rise in retail sales appeared to show economic growth had picked up pace in the final quarter.

He estimates that quarter-on-quarter growth increased to 1.2 percent in the final three months of 1999 compared with 0.7 percent growth in the third quarter.

"To get to the 1.4 percent growth rate for 1999 announced by the Federal Statistics Office we would have to have 1.2 percent growth in the fourth quarter, providing there are no revisions," Hessler said.

The Office has said detailed growth figures for the fourth quarter will not be available until March but on Wednesday gave preliminary data for the full 1999 year.

"The retail sales data seem to confirm the picture of a general acceleration of growth momentum in the fourth quarter," Hessler said.

Most forecasters now predict German economic growth will accelerate to between 2.5 and 3.0 percent in 2000.-Reuters