German Consumer Confidence Rises Moderately: GfK
Germany’s consumer climate rose moderately in February, as income expectations continued to drive optimism.
Germany’s consumer confidence index, courtesy of the GfK Group, rose from 8.2 to 8.5. Economists in a Reuters poll forecast a slight drop to 8.2. The February reading, which was based on a survey of around 2,000 people, was the highest since January 2007.
For the most part, there was no considerable change in consumer confidence in February. Income expectations rose moderately over the previous month, while economic expectations and willingness to buy declined somewhat. Overall, Germans remained relatively optimistic in February, with the balance of respondents feeling confident about recovery.
“According to Germans, their economy is continuing to gain momentum,” wrote GfK analyst Rolf Buerkl. “However, in order to establish a slightly broader basis for this upswing, making it more sustainable, it will be necessary to restart the investment engine, which has been sluggish until now.”
The German economy expanded 0.4 percent in the final quarter of 2013, the Federal Statistics Department confirmed Tuesday. Domestic consumption, which was the lynchpin of German recovery for most of last year, moderated in the fourth quarter, while net trade and capital investment improved.
Despite the relative decline in domestic demand, economists expect consumption to be a major growth driver in 2014. Germany’s export-driven economy must depend heavily on its domestic market in order to weather the storm brought on by Eurozone volatility. The Eurozone economy is projected to grow just 1 percent this year, as periphery nations struggle to escape recession.
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