Retail sales in the euro zone grew much stronger than expected in February, fuelled mainly by food, drinks and tobacco sales in Portugal, Spain and France, data from the EU's statistics agency showed today.
Retail sales in the 12-nation euro area grew 0.3 per cent month-on-month in February for a 1 per cent year-on-year rise which was well ahead of expectations.
Among euro zone countries, retail sales grew the fastest in Portugal with a 3.1 per cent year-on-year gain, followed by Spain with 2.4 per cent and France with 2.1 per cent. Europe's biggest economy Germany saw a 1.1 per cent increase.
Eurostat said retail sales for the whole of the European Union of 25 states rose 0.4 per cent month-on-month in February for a 1.9 per cent year-on-year rise.
The statistics were boosted mainly by explosive growth in countries like Slovakia, which saw a 12.5 per cent increase, Lithuania with 9 per cent and Denmark with 8.2 per cent, followed by Sweden's 4.3 per cent and Britain's 3.6 per cent.
The February increase in the euro zone takes the retail sales index to mid-2004 levels, rebounding from a January dip of a revised 0.5 per cent, and 0.5 per cent increases in December and November, in a sign consumer spending could be picking up.
The European Commission expects consumer demand to become the main driver of economic growth in the euro zone later this year and in 2006 as labour market reforms in countries like Germany and France slowly start translating into more jobs and therefore higher consumer confidence.