German consumer confidence set to improve in October
Topics: GERMAN CONSUMER CONFIDENCE
The forward-looking consumer sentiment index rose to 9.9 in October from 9.7 in September. The score was forecast to drop to 9.6.
The survey was based on around 2,000 consumer interviews conducted between September 4 and 16, on behalf of the European Commission.
Economic outlook and propensity to buy strengthened in September, while income expectations declined from the previous month. Propensity to save logged a significant drop.
After two consecutive periods of decline, the economic outlook among consumers recovered slightly. The economic outlook indicator gained three points to -9.0.
Nonetheless, consumers still see the risk of a recession. The trade conflict with the US as well as the lack of clarity as to whether there will be a no-deal Brexit are affecting export-oriented companies.
The income expectations index decreased 3.3 to 46.8 in September. Income expectations of consumers largely depend on the labor market development.
Meanwhile, propensity to buy benefited strongly from the recent decision by the ECB to further relax its monetary policy. The indicator gained 6.3 points to 55.1 points in September.
The ECB's latest stimulus package included a 10 basis points cut to the deposit rate to -0.50 percent and significant change in the wording of forward guidance. The bank is also set to restart its asset purchase programme, or APP, with monthly purchases of GBP 20 billion from November 1.
In its monthly report released Monday, Bundesbank said Germany is likely to enter a technical recession in the third quarter, but it not a cause for concern.
According to latest ifo survey, business confidence improved slightly in September driven by better assessment of the current situation. ■