German consumer mood brightens on re-openings

FRANKFURT (AFP/APP): German shoppers are heading into June feeling more optimistic about the economy as the country recovers from a third wave of the coronavirus, a key survey said Thursday.

Pollster GfK’s forward-looking barometer rose to minus 7.0 points from minus 8.6 points a month earlier.

Germany is gradually reopening large parts of its economy after lengthy shutdowns and an accelerated vaccination pace helped push down infection numbers to their lowest levels in weeks.

“Openings and an end to the strict lockdown are in sight. This is fuelling optimism about the economy and creates a sense of a fresh start,” GfK consumer expert Rolf Buerkl said in a statement. The survey of some 2,000 respondents found that consumers were significantly more upbeat about the prospects for Europe’s top economy than last month.

The index for economic expectations jumped by 34 points to 41.1, its highest level in three years.

Income expectations are also on the rise, GfK said, on hopes that reopenings in hard-hit sectors such as hospitality and gastronomy will boost the number of people back in full-time employment.

Consumers however reported that they were less likely than last month to splash out on large purchases, which GfK blamed on the still-subdued services industry.
GfK predicts that Germans will start spending more in the second half of the year, when domestic consumption is expected to resume its role as a key driver of economic growth alongside exports.
When they do decide to open their wallets, Germans should have plenty of money to spend with GfK pollsters estimating that household savings rates have risen from 10-11 percent before the pandemic to around 16% now.
Germans will have “considerable funds available” to satisfy pent-up demand, GfK noted.