Lower consumer prices have apparently encouraged Germans to shop more in April. Thanks to lower inflation, the households have spent more money, according to the report of GfK in its monthly consumer confidence survey. In addition, fewer Germans are worried about their workplace. More preoplr are convinced that the economy is on the rise.
“In April consumer confidence is clearly improving. Most important indicators show significant growth. This is particularly true for expectations of the economy and revenue”, explains GfK in its analyze.
The GfK Index, defining future consumer attitudes for May, increased by 0.4 points to 10.2 points. So after two consecutive monthly drops the direction is up again. This means that the previous month’s assessment has been right, so the weaker consumer climate from March and April will begin to recover if inflation starts to contract. Overall labor market remains a stable and credible pillar for the consumer climate and the entire German economy.
Serious slowdown in inflation to 1.6% in March (after 1.9% in January and 2.2% in February) led to an increase in all individual important sub-indices determined after a survey of 2000 users.
The economic expectations index rose sharply in April to a two-year high of 30.5 points, compared to only 18.1 points a month earlier. This is the highest level since May 2015. A robust growth of 14.1 points to 57.5 points also takes into account the Income Expectancy Index in the future, while the index, which estimates the willingness for future large-scale purchases, rises in April to 60.2 points from 55.5 points a month Earlier, reaching the highest level since May 2015.
Still, the unclear economic course of the new US President Donald Trump and Brussels’s start-up talks with the UK on leaving the EU does not negatively affect consumer attitudes. At the moment, the Germans are observing relatively calm turbulent geopolitical trends because they feel they will not be affected by them and believe that the country’s economy is oriented in the right direction.