Germany: Consumer confidence continues upward trajectory; reaches seven-year high
December 19, 2014
The mood among German consumers in December improved for a second consecutive month, recovering the ground lost in the previous months. The forward-looking consumer confidence indicator published by the GfK increased from 8.7 points in December to 9.0 points for January, coming in above the 8.8 points that markets had expected. Consumer confidence has not been this high since December 2006. According to GfK, the print generally mirrors that, “[t]he development of consumer sentiment in Germany has been very robust.”
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 December, household’s expectations for the overall economy improved, ending the downward trend that had been in place before. GfK noted that, “[e]vidently consumers currently assume that the phase of economic weakness in Germany will be temporary and are expecting their domestic economy to return to growth over the coming months.” While consumers’ willingness to buy also improved, income expectations dropped.