Germany: Consumer confidence reaches over 13-year high
March 26, 2015
The mood among German consumers improved for a sixth consecutive month. The forward-looking consumer confidence indicator published by the GfK increased from 9.7 points in March to 10.0 points for April, coming in above the 9.8 points that markets had expected. Consumer confidence has not been this high since October 2001. According to GfK, “[t]he tug of war in Europe over the future of Greece is currently having no impact whatsoever on the consumer mood of Germans. Consumers consider the German economy to be on clear upward trend based on a weak euro, which is boosting exports, and lower energy costs.”
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 March, households’ expectations for the overall economy recorded a fourth consecutive notable increase. GfK pointed out that, “[t]he low interest rate policy of the European Central Bank (ECB) has placed the euro under great pressure of devaluation. This has therefore significantly improved the competitiveness of German exports outside the eurozone. In addition, the effect of exceedingly low energy costs for households and companies is similar to a mini economic stimulus program.” In addition, consumers’ willingness to buy rose for a sixth straight month, reaching the highest level since December 2006, and households’ income expectations recorded a third consecutive improvement.