January 29, 2020 / 7:01 AM / a month ago

German consumer sentiment rises unexpectedly heading into January - GfK

    BERLIN, Jan 29 (Reuters) - German consumer morale
unexpectedly rose heading into February, the GfK market research
group said on Wednesday, suggesting that a partial agreement
reached in the U.S.-Sino trade conflict is putting German buyers
at ease.
    The GfK consumer sentiment indicator, based on a survey of
some 2,000 Germans, rose to 9.9 points in January, from a
revised 9.7 a month earlier. This confounded a Reuters Poll of
analysts of 9.6.
    GfK researcher Rolf Buerkl said a first deal in the trade
dispute between the United States and China provided relief in
Germany as an export nation dependent on a free exchange of
    Washington and Beijing earlier this month reached a truce in
their 18-month trade war, which had slowed global economic
growth and increased business uncertainty.
    GfK's sub-indicator for business expectations rose slightly
but remained negative at -3.7 points.
    A stronger propensity to buy, stable employment and bright
income expectations helped for the more cheerful mood among
German consumers, GfK said.
    Saving instead of consumption remains unattractive among
Germans with the European Central Bank's low interest rate
policy which has been pushing some banks to impose punitive
interest rates on private investors, GfK added.
    For 2020 as a whole, GfK forecast a 1% real growth in
private consumer spending in Germany.
    "The positive start of the consumer climate in 2020 confirms
our assessment that private consumption will continue to be an
important pillar of the German economy this year," Buerkl said.
    GfK survey was conducted from Jan. 8 to Jan 20, 2020. 
                                 Feb   20  Jan   20  Feb  19
 Consumer climate                9.9       9.7       10.6
 Consumer climate components     Jan   20  Dec   19  Jan  19
 - willingness to buy            55.5      52.2      57.1
 - income expectations           44.6      35.0      57.5
 - business cycle expectations   -3.7      -4.4      8.6
    NOTE - 
    The consumer climate indicator forecasts the 
development of real private consumption in the following month. 
    An indicator reading above zero signals year-on-year growth 
in private consumption. A value below zero indicates a drop in 
comparison with the same period a year ago. 
    According to GfK, a one-point change in the indicator 
corresponds to a year-on-year change of 0.1 percent in private 
    The "willingness to buy" indicator represents the balance 
between positive and negative responses to the question: "Do you
think now is a good time to buy major items?" 
    The income expectations sub-index reflects expectations 
about the development of household finances in the coming 12 
    The additional business cycle expectations index reflects 
the assessment of those questioned of the general economic 
situation in the next 12 months. 

 (Writing by Riham Alkoussa
Editing by Michael Nienaber)
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