German retail sales rose more than twice as much as expected in October, but economists said the rise was a bounce-back from a weak September level and kept their muted outlook for private consumption.
Preliminary Federal Statistics Office data showed on Wednesday retail sales had increased 1.9 percent in real terms in October compared to the previous month, while falling 0.8 percent year on year.
In a Reuters poll, economists had forecast sales would rise by 0.8 percent month on month and dip 0.9 percent versus a year earlier. In September, sales slumped 3.0 percent month on month.
"The upswing in the retail sector is still nowhere in sight," said Ulrike Hoerchens, spokeswoman for HDE German retail association, adding that the organisation had kept its forecast of a one percent annual decline in 2005 retail turnover. The Bundesbank's wider measure that includes petrol stations and vehicles showed German retail sales advanced 1.1 percent on the month from September and 0.2 percent from October 2004.
Chancellor Angela Merkel's new government has announced a cutback in benefits and tax breaks as well as a rise in sales tax to 19 percent from 16 percent by the beginning of 2007 in an effort to stem the country's widening debt.