German consumer confidence strongly improves
The forward-looking consumer confidence index for Germany climbed to 10.2 from April's 9.8 points. Economists had forecast only a modest increase to 9.9 points.
This means that the assessment from the previous month has proven to be correct, namely that the consumer climate in March and April would recover if inflation were to decrease, the GfK said.
Further, the overall stability of the labor market is a reliable and robust pillar of the consumer climate and thus the domestic economy, the group added.
The GfK confirmed its consumption growth forecast of 1.5% for 2017 from the beginning of the year.
The monthly survey is part of the GfK Consumer Climate MAXX study that is based on around 2,000 consumer interviews per month conducted on behalf of the European Commission.
The economic expectations index of the survey rose for a second straight month, adding a significant 12.4 points to reach a two-year high of 30.5. The last time the economic indicator was higher was in May 2015, when it stood at 38.3 points, the GfK said.
The income expectations indicator rose strongly by 14.1 points to 57.5 points, which was the same level as a year ago.
Consequently, German consumer were more positive about making big purchases. The propensity to buy index climbed 4.7 points to reach 60.2 points, which was the highest since May 2015, when it was 62.6. ■