Germany: Consumer confidence rises in July
June 26, 2012
German consumers remain confident, as better personal financial prospects outweigh increasing uncertainty stemming from the perennial Eurozone debt crisis. The forward-looking GfK consumer confidence indicator for July rose to 5.8 points, up from the 5.7 points recorded in June. The reading defied market expectations, which had consumer sentiment edging down to 5.6 points.
While, the GfK's overall consumer climate indicator refers to July, its sub-indices refer to June. According to the GfK, income expectations improved markedly over the previous month, boosted by positive income developments due to declining unemployment and improving salary agreements. Supported by improving income expectations, consumers' buying propensity rose over the previous month. In contrast, economic expectations deteriorated in June. The drop reflected consumers' negative assessment of the global economic developments as well as the ongoing discussions about the allocation of financial resources to stabilise the Spanish banking system.
Author: Ricardo Aceves, Senior Economist