Germany's retail sales fell unexpectedly in March due to a value-added tax hike in January, according to data released on Monday by the German Federal Statistics Office.

After being adjusted for inflation and seasonal swings, retail sales in March fell 0.7 percent from the previous month, the Federal Statistics Office in Wiesbaden said.

Analysts had expected a 0.9 percent month-on-month rise in retail sales in March.

Economists attributed the surprise fall mainly to consumers' spending reluctance after German government raised value-added tax to 19 percent from 16 percent in January.

However, retail sales could still recover from the higher tax as the booming economy encourages companies to create more jobs and grant more pay to employees after a protracted period of low wage increases.

Source: Xinhua