Germany’s consumer climate stabilizes in September: Gfk
Consumer mood in Germany experienced highs and lows in September, but was generally positive, according to a monthly report from Gfk.
The Consumer Confidence Survey, which measures consumer confidence in economic activity for the Eurozone’s largest member, is forecasted to reach 7.1 in October, following a revised value of 7.0 the previous month. The report showed German consumers are increasingly optimistic about the country’s economic outlook over the near term, but are still concerned about income growth. Willingness to buy once again improved after reaching a record high the previous month, and economic expectations are on a clear upward trend.
Expectations concerning income growth declined for a second consecutive month, but remained relatively high. After trending higher since the beginning of the year, income expectations have fallen the past two months as more Germans are concerned about rising food prices hampering their purchasing power. Food prices have increased around 5 percent year-on-year. Another factor behind the declining optimism toward income was the German elections that took place last week.
Because the Gfk survey was administered prior to the elections, it is likely some consumers were worried about financial burdens emanating from the ongoing Eurozone debt crisis, especially in Greece. The Hellenic republic is reportedly seeking a third bailout valued at €10 billion. Since 2010, Greece has received €209 billion worth of rescue loans.
The Gfk report concluded the upward trend that started early in the year will likely continue in the coming months. As the Eurozone’s growth engine, Germany has shown gradual signs of improvement over the past several months, having experienced a strong investment rebound in the second quarter. The German economy expanded 0.7 percent in the second quarter, and 0.5 percent year-on-year, according to the Federal Statistics Office in Wiesbaden.
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