Berlin - German consumer confidence climbed more than
forecast amid hopes of an improving economic outlook and a rising
willingness to buy, according to a survey released Tuesday.
The Nuremberg-based GfK marketing group said its forward-looking
consumer confidence index rose to 2.9 points in July, compared to an
upwardly revised 2.6 in June.
Analysts had predicted that the GfK index, which is based on
around 2,000 German households would essentially remain unchanged in
July at 2.5 points.
'Following the recent growing number of signs that the economic
downturn may be coming to an end, consumer hopes of economic
stabilization are intensifying and accordingly, economic expectations
are increasing moderately,' GfK said in a statement.
The GfK saw both the solid state of the labour market and
dwindling inflation as also helping to shore up the mood of consumers
in Europe's biggest economy. The new stability in particular
underpinned Germans' income expectations and propensity to buy.
But the GfK warned that the threat of rising unemployment would be
the deciding factor in whether the latest uptick would lead to a
sustained increase in consumer confidence.
A breakdown of the GfK survey for July showed German consumers'
willingness to buy rose to 14.5 in June from 12.5 in May while income
expectations jumped six points to reach a 14-month high of minus 3.3.
At the same time, a component of the GfK survey gauging economic
expectations rose for the third month in a row to reach a nine-month
high of minus 22.6.
The rise in the GfK index comes in the wake of a raft of key
economic sentiment surveys pointing to growing optimism that the
economic downturn has started to bottom out and that a pickup in the
German economy should start to take shape by the end of the year.
On Monday, the Munich-based Ifo economic research institute said
its closely watched German business confidence survey hit a seven-
month high in June after rising for three consecutive months.
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