Germany Consumer Confidence


Consumer confidence improves unexpectedly

Despite the escalating debt crisis in the Eurozone, consumers still show strong willingness to buy. In December, the GfK Institute projects its forward-looking indicator to rise to 5.6 points from a revised 5.4 points in November (previously reported: 5.2 points). The reading surprised private sector analysts on the upside as they had expected the index to remain at the unrevised 5.2 points. While the overall consumer confidence indicator refers to December, the GfK Institute also publishes three sub-indicators (economic expectations, income expectations and buying propensity), which refer to November. According to the Institute, the sub-indicators of economic expectations and income expectations deteriorated in November, as consumers became increasingly concerned that economic growth will weaken on the back of the ongoing debt crisis. On the other hand, consumers' propensity to buy rose sharply in November. According to the Institute, ?the increase in willingness to buy in these times of growing uncertainty ? caused primarily by the debt crisis ? may seem surprising.? The improvement probably reflects favourable domestic conditions, particularly in the labour market.

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