German retailers report favorable business situation at year start

German retailers assessed the current business situation as the most favorable in past five years and were optimistic about their sales performance in 2016, said German retailers' association HDE on Tuesday.

In the first two months of this year, German retail sales increased by 2.8 percent compared with the same period of 2015, HDE said, adding that it saw the industry on track to reach a 2-percent sales growth this year.

"The business environment for retail is favorable," said HDE Managing Director Stefan Genth, "The labour market is developing positively, incomes are increasing and interest rates are low."

Together with government spending buoyed by demand for accommodating and integrating some 1.1 million refugees, private consumption drove Europe's biggest economy to grow by 1.7 percent in 2015.

A separate report from German federal statistics office Destatis on Tuesday showed that consumer prices in Germany increased annually by 0.3 percent in March. The weak inflation was mainly due to a decrease in energy prices which dropped by 8.9 percent year on year and freed up more purchasing power in German households. Endit