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U.S. Markets

German consumer morale brightens less than expected

FILE PHOTO: People are seen at the Rhein Center shopping mall after the re-opening of the borders, amid the coronavirus disease (COVID-19) outbreak, in Weil am Rhein, Germany June 15, 2020. REUTERS/Arnd Wiegmann/File Photo

BERLIN (Reuters) - German consumer morale improved less than expected heading into October, a survey showed on Wednesday, putting a damper on hopes that household spending in Europe’s largest economy will be strong enough to drive a quick recovery from the COVID-19 shock.

The GfK institute said its consumer sentiment index, based on a survey of around 2,000 Germans, edged up to -1.6 heading into October from an upwardly revised -1.7 in the previous month.

The reading missed a Reuters forecast for an increase to -1.0 and followed an unexpected drop in the previous month.

GfK consumer expert Rolf Buerkl said the German consumer climate had stabilized despite a recent rise in new coronavirus infections and the growing risk of another round of lockdown measures to contain the COVID-19 pandemic.

“It seems as if the massive stimulus packages for consumers and companies are the right measures to help Germany get out of the worst recession in post-war history,” Buerkl said.

Since March, Chancellor Angela Merkel’s coalition government has implemented an unprecedented array of stimulus measures, financed with record new borrowing of some 218 billion euros ($256.15 billion), to cushion the impact of the pandemic.

But Buerkl added that a further improvement in consumer morale was depending on the development of the pandemic and the labour market.

Reporting by Michael Nienaber, editing by Emma Thomasson

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