BERLIN: The mood among German consumers rose to its highest level in almost 16 years heading into July, a survey showed on Thursday, supporting expectations that private consumption will contribute strongly to growth this year.
The consumer sentiment indicator, published by the Nuremberg-based GfK institute and based on a survey of around 2,000 Germans, rose to 10.6 going into July, the highest level since October 2001.
A Reuters poll had expected an unchanged reading of 10.4, from last month, also a near 16-year high.
GfK linked the high reading to income expectations reaching their highest level since reunification in 1990 as Germany’s robust labour market continues to fuel consumption and growth.
“The positive outlook for income growth among consumers is primarily based on the excellent condition of the labour market,” GfK researcher Rolf Buerkl said in a statement. “Employment is still growing noticeably. The number of people in employment is expected to rise by more than half a million this year.”
Consumers also held very positive expectations of the economy, with a sub-index measuring their economic outlook reaching its highest level in almost three years.
“Consumers believe that the boom in Germany is gaining traction despite global economic risks,” Buerkl said. “A weak euro, low oil prices and the European Central Bank’s expansive monetary policy all ensure that the economic engine continues to gain pace.” He added that consumers appear unfazed by risks to the economy linked to possible US trade restrictions and the beginning of divorce talks between Britain and the European Union. — Reuters
Oman Observer is now on the WhatsApp channel. Click here
