German consumer confidence improves for August: GfK

27th July 2010, Comments 0 comments

The football World Cup and good economic news has brightened the mood of German households according to the latest barometer of consumer confidence published on Tuesday by the GfK institute.

For August, the GfK index rose to 3.9 points from 3.6 in July and 3.5 in June, adding another sign to the list that underscores German economic vigour, a statement said.

The July figure was revised higher meanwhile.

Thanks to its strong export position, Europe's biggest economy is emerging more quickly than expected from its worst post-war recession.

Economists and some political figures have estimated activity could expand by 2.0 percent in 2010.

Unemployment remained tamed throughout the crisis, and has declined since early this year. The number of unemployed workers could be on track to fall below three million, which has lifted confidence among German households.

Their expectations with respect to personal income and the economy in general rose sharply between June and July, GfK said, though their inclination to make large purchases declined.

The institute said that could be a result of shopping for new televisions ahead of the World Cup competition, leading consumers to cut back the following month.

GfK said it would wait to see if the good mood continued in September, while noting that conditions existed for such a positive trend.

In general, Germans are more inclined to save than to spend, making consumption a traditionally weak pillar of an economy that relys largely on exports.

© 2010 AFP

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