Germany: Consumer confidence jumps to highest level in over six years
January 29, 2014
According to the forward-looking consumer confidence indicator elaborated by the GfK, German consumer sentiment is, "buoyant at the start of 2014." The indicator, which jumped from a revised 7.7 points in January (previously reported: 7.6 points) to 8.2 points in February, overshot market expectations of 7.7 points and reached the highest point since August 2007. This represents the fifth consecutive month of improvement.
While the overall consumer confidence indicator refers to February, the GfK also develops three sub-indicators, which refer to January. According to the GfK, consumers' economic expectations, income prospects and willingness to buy big-ticket items improved considerably compared to the previous month. Income prospects climbed to the highest level in 13 years, while consumers' willingness to buy jumped to the highest points in over seven years. The GfK added that private consumption had been essential to support overall economic growth in 2013, while it concluded that the outlook for domestic demand, "should also be regarded as good for 2014."
FocusEconomics Consensus Forecast panelists expect private consumption to expand 1.3% this year, which is unchanged from last month's estimate. For 2015, panelists see private consumption growing 1.5%.
Author: Ricardo Aceves, Senior Economist