Germany: Consumer confidence stabilises in September
August 28, 2012
The perennial debt crisis in the Eurozone continues to cause concerns among German consumers. However, rising household income is partially offsetting the adverse external outlook. The forward-looking GfK consumer confidence indicator for September remained stable at August's 5.9 points, which represents the highest level since March. The print contrasted market expectations that had consumer sentiment edging down to 5.8 points. While the overall consumer climate indicator refers to September, its sub-indices refer to August. According to the GfK, the economic expectations sub-index registered a sharp drop over the previous month, reflecting consumers' increasing fears that the economic weakness of debt-stressed countries in the Euro area periphery may negatively impact the German economy. Meanwhile, despite a slight drop in the sub-indicators related to income expectations and propensity to buy, both-sub components remain at healthy levels, confirming the notion that private consumption should become a key growth engine going forward.
Author: Ricardo Aceves, Senior Economist