- GfK market research group
Another indicator hit its pre-crisis level, as confidence among German consumers improved more than expected, bolstering the case Europe's largest economy will post moderate growth this year on the back of strong consumer spending. On Wednesday German Gfk research group said its forward-looking gauge of consumer sentiment ticked up to 7.1 point going into October, from an upwardly revised 7.0 in the preceding month. The original September's reading was 6.9, while the majority of analysts expected a slightly weaker figure of 6.9. The improvement chimed with other strong fundamentals is reinforcing a view the recovery is gradual but steady. Germans, who are usually keen on savings, are now showing more willingness to spend this month, encouraged by a crucially stable labour market and record-low interest rates. A day earlier report showed a gauge of sentiment among German companies advanced to 107.7 in September.
In contrast, income expectations dropped 3.5 points, posting the second consecutive monthly drop, however, still at its historically high level of 33.7. Supported by strong data, research group reaffirmed that private spending in Europe's powerhouse will advance by around 1% in real terms this year, and taking into account the overall economic growth would be below 0.5%, private consumption will be a vital pillar for German economy.
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