“Private consumption has been an important cushion of the recession,” ING senior economist Carsten Brzeski commented, though he noted that retail sales figures were often revised later.
Economists warned that consumption began to slump heavily in the second half of the year and that Germany could soon find itself in a consumer recession.
The federal statistics office’s provisional figure is based on data from the first 11 months of the year.
At constant prices however, the drop was expected to be between 2.5 and 2.7 percent, the Federal Statistics Office (Destatis) said.
That is nonetheless better than a contraction of around five percent forecast for the overall economy last year, its worst slump since World War II.
A key factor supporting consumption was the less-than-expected rise in unemployment, in large part the result of government subsidised short-work schemes, from which around one million workers benefit at present.
The retail sector federation HDE and many economists are prudent regarding 2010 meanwhile, because unemployment is expected to climb despite a pickup in exports and industrial output.
In November, retail sales lost a steep 1.1 percent from their level the previous month, according to seasonally adjusted figures released by Destatis.
Brzeski termed the November figure “a setback.”
UniCredit counterpart Alexander Koch said the fourth quarter of last year would show a decline and added: “A consumer recession in the second half of 2009 is in the cards.
“The early Christmas shopping period didn’t bring a boost to retail sales – quite the contrary,” he noted.