BERLIN, January 4, Reuters -- German retail sales rose unexpectedly in November, despite renewed COVID 19 restrictions that held back a consumer-led recovery in Europe's largest economy.
Retail sales were up 0.6% on the month in real terms, according to the Federal Statistics Office. Retail sales rose 0.9% in real terms and 3.1% in nominal terms for 2021, reaching record highs despite curbs on non-essential visits to the shops.
Alexander Krueger, an analyst with Hauck Aufhaeuser Lampe private bank, said that the situation will remain tense due to renewed coronavirus restrictions.
With the industry still struggling with supply shortages in microchips and other components, it would be hard for manufacturing to fill the output gap created by weaker consumption, he added.
Consumer morale would deteriorate further as the epidemic and rise of the Omicron variant push the economy to the brink of recession, according to the GfK market research institute last month.
In the final three months of 2021, the Ifo institute expects the German economy to shrink by 0.5% and stagnate in the first three months of 2022, according to the Ifo institute. This would bring Germany close to a technical recession, defined as two consecutive quarters of contraction.
In Germany, high infection rates caused by the Delta variant have resulted in restrictions for retailers and service providers in December.
Germany banned unvaccinated people from entering non-essential establishments. The 2 G rule, which allows access only for vaccinated or recovered people, has hit the Christmas business.
The rapid spread of the Omicron variant is now affecting the outlook for retailers at the beginning of 2022 as well.
At a Pandemic emergency meeting on Friday, Chancellor Olaf Scholz and state premiers are expected to discuss further measures and restrictions.