BERLIN, July 25 German consumer morale rose to
its highest level in more than 7-1/2 years heading into August
as shoppers became more upbeat about their future income
prospects than at any point since 1991, a survey showed on
Market research group GfK said its forward-looking consumer
sentiment indicator, based on a survey of around 2,000 people,
climbed to 9.0 going into August from 8.9 in July.
That was the strongest reading since December 2006 and was
higher than the Reuters consensus forecast for 8.9 - a positive
sign for domestic demand, on which the government is relying to
drive growth this year as exports are seen remaining weak.
"Despite the escalation in the situations in Israel and
Ukraine, German consumers continue to be exceedingly optimistic
this summer," GfK analyst Rolf Buerkl said.
He said the downing of a Malaysia Airlines plane over
Ukraine last week had not been factored into the survey, which
was almost complete at the time of the crash, but said this,
along with the Gaza crisis, could start to hurt consumers' mood.
Germans' income expectations have risen to their highest
level since 1991, when Gfk started collecting data for the newly
Germans are benefitting from a stable labour market, rising
wages and moderate inflation, and GfK said retirees could also
expect a real increase in income this year.
Consumers' expectations for German economic growth took a
slight dip due to the crises in the Middle East and eastern
Ukraine, but remained at a high level overall.
Shoppers became less willing to purchase as the effects of
the European Central Bank's June rate cut, which had discouraged
Germans from saving, started to wear off.
Other recent indicators have shown industrial production,
orders, exports and monthly retail sales falling while investor
morale has also weakened.
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(Reporting by Anja Nilsson; Editing by Michelle Martin and