Euro zone retail sales were flat in December despite it traditionally being one of the busiest months of the year, figures showed, suggesting consumer demand remains weak and the economic recovery fragile.

On a year-on-year basis, European Union statistics agency Eurostat said retail trade fell 1.6 percent across the 16-country euro area in December.

Economists polled by Reuters had expected a 0.4 percent monthly increase and a 2.5 percent year-on-year fall.

The data suggests consumer demand, normally strong in the Christmas season, is unlikely to have contributed much to an expected recovery in economic growth in the fourth quarter of 2009.

Eurostat revised its November retail trade figure to -0.5 percent month-on-month from a previous -1.2 percent. The annual index was revised to -2.0 percent from -4.0 percent.

Economists say people are likely to keep spending tight because of growing unemployment, which rose to 10 percent in the euro zone workforce in December, the highest rate since August 1998.

GDP growth will likely depend on government spending as tens of billions of euros are pumped into the economy to stimulate demand, and on companies replenishing their inventories.

In a breakdown, Eurostat said euro zone retail sales of food, drinks and tobacco increased 0.3 percent month-on-month in December while non-food products fell 0.2 percent.

Among countries that have reported figures, the biggest monthly increases in sales were in Austria, France, Spain, Slovenia and Slovakia.

In the wider, 27-nation European Union, sales fell 0.1 percent on the month and decreased 1.0 percent year-on-year.

Reuters, Balkans.com Business News