FRANKFURT, March 30 (Reuters) - German retail sales are still set to stagnate or ease this year in nominal terms, the HDE retail association said on Monday, reiterating its forecast from early February.
Retail sales in Europe's biggest economy were likely to hold steady at last year's level at least until mid-year before worsening somewhat in the second half, HDE said in a statement.
"Overall retail sales will move in a corridor from zero to minus 1 percent in nominal terms," it added, calling the situation "tense" after a cautious start to the year.
In 2008 retail sales fell 0.4 percent in real terms and rose 2.1 percent in nominal terms.
At a Duesseldorf news conference, HDE Managing Director Stefan Genth criticised German government subsidies that pay motorists 2,500 euros ($3,307) for junking old cars if they buy a new one.
"Consumer funds that the state is channelling by the billions into the car market are being sucked out of other areas, primarily the retail sector," he said.
He called instead for sharp cuts in taxes and fees, especially for people with small or mid-level incomes.
"Consumers can best decide for themselves what they want to spend money on," he said. ($1=.7560 Euro) (Reporting by Michael Shields in Frankfurt and Nikola Rotscheroth in Duesseldorf; Editing by Hans Peters)