Germany: Consumer confidence continues upward trend and reaches a six-year high
June 26, 2013
Households remain in an optimistic mood, amid better income prospects and solid job market conditions, which have also benefited general economic prospects. In July, the GfK forward-looking consumer confidence indicator jumped to 6.8 points from 6.5 points in June, which exceeded market expectations that had the index remaining unchanged at 6.5 points. The reading represents the highest level since September 2007.
While the overall consumer confidence index refers to July, GfK also publishes three sub-indicators that refer to June. According to GfK, consumer's economic expectations and income prospects improved notably compared to the previous month, as households remain considerably optimistic on the labour market as well as on expected wages increases. Despite higher economic and income prospects, consumers' willingness to buy fell slightly over the previous month, but GfK noted that the sub-indicator remains "at an extremely high level".
Nonetheless, GfK added that "it remains to be seen what impact the flood disaster in Bavaria and East Germany will have on the economic mood".
FocusEconomics Consensus Forecast panellists anticipate private consumption to expand 0.8% this year, which is unchanged from last month's estimate. For 2014, panellists see private consumption growing 1.1%.
Author: Ricardo Aceves, Senior Economist