Germany: Consumer confidence estimated to reach eight-month high in February
The forward-looking GfK Consumer Climate index showed that German consumer sentiment is projected to rise from 9.7 in January to 9.9 in February. This would mark the highest level in eight months and was likely influenced by developments on the Sino-American trade dispute front. Moreover, backward-looking data for January—which is released at the same time—showed a broad-based improvement.
Economic expectations became less dire in January on the back of positive developments in the Sino-American trade dispute and the waning worries over a recession in Germany. In line with improved economic expectations, income expectations rose strongly as the German labor market remains tight; however, structural changes in the automotive sector pose a risk. Meanwhile, consumers’ propensity to buy reached its highest level in a year. This is mainly due to the strong labor market and real income growth. The ultra-loose monetary policy of the ECB further drove the uptick in this sub-indicator, as saving has become an unappealing alternative.