After robust Spanish GDP numbers, German retail sales record their strongest first-half increase in at least 20 years. Is the euro zone finally on the path to full recovery? David Pollard reports.
Retail sales data is a volatile indicator, bouncing around from one month to the next. Which might explain why Germany's can record - at minus 2.3 per cent - their biggest drop in nearly nine months. And at the same time show - at plus 2.5 per cent - the biggest half-yearly increase in at least 20 years. But which to believe? Panmure Gordon's David Buik. (SOUNDBITE) (English) DAVID BUIK, MARKET COMMENTATOR, PANMURE GORDON, SAYING: ''Germany is a very strong economy. There are areas that worry me terribly about the people - in terms of the pensions, they're getting far too much, the population is getting older and they are going to have problems going forward. But to concern you and I and the rest of the world over the next 3 to 6 months, I think Germany is pretty well placed.'' The numbers bolster the belief that the German consumer is coming to the euro zone's rescue. Ready to spend again on record employment levels - and cheap oil. Spain too showing renewed signs of strength - its output in the second quarter grew by 1 percent. Even Greece enjoying a mini retail boom - its sales in May were up by 4.2 per cent year on year. Despite a debt crisis that's here to stay, says Buik. (SOUNDBITE) (English) DAVID BUIK, MARKET COMMENTATOR, PANMURE GORDON, SAYING: ''The fact remains, you and I know, that twelve million people - hell has a better chance of freezing over than them being able to service a debt of 320 billion euros, let alone repay it. It cannot happen.'' Cheap energy has been bringing down euro zone inflation. Latest numbers show a 0.2 per cent annual rate for July. That's clearly above the deflation that was feared earlier this year - but still leaves the ECB with a big ask - to push prices up by its target rate of close to 2 per cent.