FRANKFURT–Consumer sentiment in Germany is set to improve in October following the European Central Bank’s easing package, market research group GfK said in its monthly survey on Thursday.
GfK’s forward-looking index is set to rise to 9.9 points in October from 9.7 points in September, GfK said. The outcome is better than expected by The Wall Street Journal’s survey of economists, whose consensus was for 9.7 points. GfK uses three sub-indexes for the current month to derive a sentiment figure for the coming month.
While the already familiar flashpoints, such as the global economic slowdown, trade conflicts and Brexit discussion are affecting consumers, “the decision of the European Central Bank to further relax its monetary policy is having an impact on consumers in September,” GfK said.
Among the sub-indexes, consumers’ economic outlook and the propensity to buy have risen, but their income expectations have declined, GfK said.
The better-than-expected German consumer sentiment follows a stronger-than-expected improvement in Ifo business climate data which were released Tuesday. However, the companies’ expectations component of the Ifo survey fell to a decade-low. Economists interpreted the September Ifo survey as one bringing some relief, but still leaving it likely that Germany entered a recession in the third quarter.
German consumers appear to share this view. While their economic outlook improved they also say that the risk of recession cannot be eliminated, GfK said.
Consumers’ economic expectations came in at minus 9.0 points in September, rising from minus 12.0 points in August, reversing after two consecutive declines, GfK said. Income expectations dropped for the second time, to 46.8 points from 50.1 points. The propensity to buy rose to 55.1 points in September from 48.8 points in August.