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German consumer morale hits highest level in 13-1/2 years: GfK
[BERLIN] Morale among German consumers was at its brightest in 13-1/2 years heading into April, helped by expectations that incomes will rise, a survey showed on Thursday, in a sign that shoppers will continue to bolster Europe's largest economy this year.
GfK market research group said its consumer sentiment indicator, based on a survey of 2,000 Germans, rose to 10.0 going into April from 9.7 in March.
That was its highest reading since October 2001 and beat the Reuters consensus forecast for 9.8. "German consumers are becoming ever more optimistic," said GfK analyst Rolf Buerkl.
Private consumption helped drive 1.6 per cent economic growth last year and is expected to provide support this year as Germans benefit from record low unemployment, rising wages and low inflation.
GfK said Germans felt more optimistic about the economy than at any time since July 2014, especially as the low interest rates set by the European Central Bank (ECB) are helping push the euro lower and therefore making German exports more competitive outside of the euro zone.
German consumers' willingness to make purchases was at a more than 8-year high, partly due to a robust labour market and partly due to rock-bottom interest rates, which have weakened the incentive to save. "Rising employment and income prospects coupled with low energy prices are giving consumers planning security and the financial means for making major purchases with renewed vigour," Mr Buerkl said.
GfK said that while the Greek crisis was not yet dampening the mood, the German economy "could suffer a severe setback" if Athens pulled out of the euro zone. "If a Grexit, where Greece renounces the euro and subsequently leaves the euro zone, were in fact to materialise, the German economy could suffer a severe setback as a result," it said.