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GfK: German Consumer Climate Increases Again

The Gesellschaft für Konsumforschung (Society for Consumer Research) found that economic expectations are on the rise again in Germany.

A strong domestic demand and low inflation rates in the last months have caused the Germans to be more willing to spend their money for consumer goods. Evidently the consumers are currently primarily seeing the extremely robust domestic demand trend when assessing Germany’s economic situation.

The economy as a whole has noticeably lost momentum in the first quarter of this year. According to preliminary data from the Federal Statistical Office, the gross domestic product only increased by 0.3 percent in the first three months of 2015 in comparison to the previous period. It was still 0.7 percent in the last quarter of past year.

Continuing tough negotiations between Greece and the EU to determine if further financial assistance will be given to avoid bankruptcy for the southern country still do not seem to have a lasting impact on consumers.

Private spending is a key driver for economic growth this year. However, existing risks still must not be forgotten. Tough negotiations on the future of Greece in the euro area, the Ukraine crisis, and IS terrorism could noticeably dampen consumption in Germany, according to the GfK.

These findings are extracts from the “GfK Consumer Climate MAXX survey”, which is based on around 2,000 consumer interviews conducted each month on behalf of the European Commission. The GfK Consumer Climate survey has been conducted since 1980.

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