China's Ministry of Commerce forecast Friday a 16 percent year on year increase in the country's retail sales for 2010 on a domestic economic recovery.

An acceleration in urbanization will boost consumption and improvements in social welfare will also encourage consumers to spend, according to the report posted on the MOC website.

The report did not forecast the volume of retail sales for the year.

Rural areas' increased demand and a boom in services consumption will also boost the expansion, the report said.

The report also predicted increased "green consumption," the consumption of energy-saving commodities and services, as the idea of a low-carbon lifestyle gains popularity.

Adjusted for inflation, China's retail sales rose 16.9 percent year on year in 2009 in real terms.

Consumption contributed 4.6 percentage points, or 52.5 percent, to last year's 8.7-percent GDP growth, data from the National Bureau of Statistics show.