Germany: Consumer confidence rises to over 13-year high
April 23, 2015
The mood among German consumers improved for a seventh consecutive month in May. The forward-looking consumer confidence indicator published by the GfK inched up from 10.0 points in April to 10.1 points for May, falling slight short of the 10.2 points that markets had expected. Consumer confidence has not been this high since October 2001. GfK commented on May’s print stating that, “[d]evelopments in the consumer mood in Germany have not been uniform in April. The consumer climate has improved, but not as strongly as in recent months.”
In addition to the overall consumer confidence indicator, which estimates consumer confidence in the coming months, the GfK elaborates on three sub-indicators, which refer to the previous month. In April, households’ expectations for the overall economy recorded a slight moderation over the previous month. GfK pointed out that, “[i]t is possible that consumers are beginning to respond to the continued uncertainty on the future of Greece, especially a potential Grexit.” Consumers’ willingness to buy registered the first drop in six months, but remained relatively high. Conversely, households’ income expectations recorded another improvement and reached the highest level since reunification. According to GfK, the increase resulted from low inflation rates and gains in income.