Germany Consumer Confidence


Consumer confidence rises to over 13-year high

The mood among German consumers in February improved for a fourth consecutive month. The forward-looking consumer confidence indicator published by the GfK increased from 9.3 points in February to 9.7 points for March, coming in above the 9.5 points that markets had expected. Consumer confidence has not been this high since October 2001. According to GfK, consumers, “German consumers are seemingly not […] greatly affected by the recent escalation of the situation in eastern Ukraine, the ongoing tensions between Russia and the West as well as events in Greece. Instead, their optimism continues to grow […]. The collapse in energy prices is boosting the purchasing power of private households and giving them some freedom to make other purchases. […] After falling further in February to reach a record low, propensity to save continues to be a key pillar of the consumer climate.”

In addition to the overall consumer confidence indicator, which estimates consumer confidence in the coming month, the GfK elaborates on three sub-indicators, which refer to the previous month. In February, households’ expectations for the overall economy recorded a third consecutive notable increase. GfK pointed out that, “low inflation and a weak euro in the wake of the ECB's expansionary monetary policy are generating the necessary momentum.” In addition, consumers’ willingness to buy rose for a sixth straight month, reaching the highest level since January 2007, and their income expectations also improved again.

FocusEconomics Consensus Forecast panelists expect private consumption to expand 1.8% in 2015, which is up 0.2 percentage points from last month’s estimate. For 2016, panelists see private consumption growing 1.4%.

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Germany Consumer Confidence Chart

Germany Consumer Confidence February 2015 0

Note: GfK Consumer Climate Index.
Source: The GfK Group.

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