German consumer sentiment hit by Greek crisis: GfK

26th July 2011, Comments 0 comments

German consumer sentiment has been hit by the Greek debt crisis, and a widely-watched index fell to a forecast 5.4 points for August from 5.5 points in July, the GfK research institute said Tuesday.

That marks the lowest level since November, when the indicator stood at 5.2 points, GfK said.

The institute had initially estimated the July level as 5.7 points, following 5.6 points in June, which means that consumer sentiment did not edge higher this month as initially predicted for Europe's biggest economy.

"The ongoing discussions about the best way to resolve Greece's debt crisis and the associated potential dangers for the single European currency are unsettling German consumers, and economic and income expectations have weakened accordingly in July," a GfK statement said.

GfK polled around 2,000 consumers, many of whom were surveyed before eurozone leaders and private creditors agreed late Thursday to a new rescue plan for Greece.

In its latest check of the German business climate meanwhile, the Ifo economic research institute said Friday that sentiment had also dropped, owing in large part to cloudier outlooks in the manufacturing and retail sectors.

GfK added however that "Germans still expect that the economy will continue to record growth, even if this is not quite as strong as previously."

© 2011 AFP

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