Retail sales in the eurozone came in above expectations but growth slowed sharply from the previous month, as consumers in the currency bloc struggled with the effects of the economic downturn.

Sales at stores in the 17 countries sharing the European currency rose 0.1 per cent in June after a 0.8 per cent rise in May, the European statistics office Eurostat said. The statistics office increased its reading for May, to 0.8 per cent from the 0.6 per cent it had announced previously.

The result for June was above the average expectation in a Reuters poll of 18 analysts that retail sales would be flat. Expectations varied between a 0.3 per cent increase and a 0.8 per cent fall.

On an annual basis, where economists had forecast a fall of 1.4 per cent, with a range between -1.9 and -1 per cent, retail sales fell 1.2 per cent.

Sales in Germany, the largest economy in the eurozone, fell 0.1 per cent in June compared to May, the third decline in a row.

The decline was most pronounced in Ireland, where sales fell 2.2 per cent, Eurostat said, while Slovenia was the best performer in the currency area, with an increase of 2.4 per cent.

Retail sales are a very volatile indicator with readings of previous months being regularly adjusted.

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