Eurozone: Retail sales continue to strengthen - ING

Retail sales in the Eurozone continue to soar on the back of buoyant consumer demand, explains Bert Colijn, Senior Economist at ING.

Key Quotes

“Eurozone retail sales were up by 0.5% MoM in June. This confirms that consumption has been an important driver of strong Q2 GDP growth at 0.6%.”

“It can hardly be a surprise that sales are soaring at the moment. Job growth in the Eurozone is accelerating, consumer confidence reached its highest level since 2001 in June and price growth continues to be subdued. This favorable environment has caused retail sales to increase by 3.1% YoY in June, the strongest annual growth rate in about two years. The level of sales is the highest on record. All product categories saw healthy increases of c.3% YoY with electrical goods and furniture growing the strongest at 3.9% YoY.”

“The strong momentum for consumption is likely to continue in the months ahead. Even though consumer confidence is leveling off somewhat with a slight decline in July, it is still at unusually high levels. As price growth is expected to remain subdued for the months ahead and businesses are expecting a further acceleration of job growth, it seems that consumer spending continues to have upside potential in the months ahead. That in turn means that sound economic growth in the Eurozone will continue to be supported by the consumer.”