German retail sales fell last year for the first time since 1997, as recession-hit consumers reined in spending.

For 2002 as a whole, retail sales declined by 2.3%, their worst performance since records began two decades ago.

Especially gloomy are month-by-month figures, which show an apparent slowing of sales during the year, contradicting the impression that Germany may be recovering from its slump of a year ago.

The retail figures represent further bad news for Chancellor Gerhard Schroeder's government, which is coming under fire for its alleged mishandling of the economy.

Down again

The overall German economy is still growing, but only sluggishly.

Gross domestic product inched up by 0.2% in 2002, the feeblest growth in nine years.

Germany flirted with recession at the end of 2001, but seemed to have recovered by the middle of last year.

Now, however, there are mounting fears that it is heading towards a deeper slump.

Since Germany accounts for one-third of eurozone economic output, any signs of weakness are seen as bad news for the euro.