German consumers upbeat despite headwinds: survey

FRANKFURT AM MAIN (AFP) – German consumers are more optimistic heading into February, a key survey showed yesterday, with a buoyant labour market offsetting concerns about external risks to Europe’s top economy.

Market research firm GfK’s forward-looking monthly barometer stood at 10.8 points for February, up from 10.5 in January.

The survey of some 2,000 people showed that shoppers were more upbeat about their income expectations and more inclined to make large purchases, thanks to record-low unemployment and high wages.

At the same time, respondents grew more pessimistic about the economic outlook as Brexit uncertainty, United States (US)-led trade tensions and slowing Chinese growth weigh on minds in export-reliant Germany.

“For now, consumers aren’t letting the economic slowdown influence their spending,” the pollsters said in a statement.

But the mood could change, GfK warned, given that shoppers “assume that the German economy will continue to lose momentum” in the months ahead.

The German economy grew just 1.5 per cent in 2018, compared with 2.2 per cent in the two previous years. The International Monetary Fund (IMF) last week downgraded its 2019 growth forecast for Germany to 1.3 per cent, 0.6 points lower than its previous estimate.

The German Economy Ministry slashed its projections when it unveiled its latest forecast for 2019 yesterday.