Eurozone: No rebound in retail sales

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After having fallen sharply since the spring of 2022, retail sales excluding cars remained flat in April and May. Car registrations peaked last December and have been falling steadily ever since. Household consumption contributed negatively to growth in Q4 2022 and Q1 2023. Unless it rebounds strongly in June, it will probably continue to weigh on activity in Q2 2023.


High inflation continues to put pressure on the purchasing power of European households. Although the May and June figures were slightly lower than in previous months, they remained high. In addition, central bank rate hikes should continue to increase the cost of credit.

In Q4 2022 and Q1 2023, GDP declined very slightly, but employment increased by 0.9%. This type of divergence is not likely to last, especially as employment data in the European Commission’s confidence surveys have begun to deteriorate. A clear rebound in household consumption therefore seems unlikely in the short term.


Written on July 7, 2023. This is not an investment advice. Opinions subject to change.

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