September 26, 2019 / 6:01 AM / 2 months ago

TABLE-German consumers more keen to spend after ECB rate cut - GfK survey

    BERLIN, Sept 26 (Reuters) - German consumer morale improved
slightly heading into October lifted by the European Central
Bank's stimulus package, the GfK market research group said on
Thursday, suggesting a recent ECB rate cut aimed at reviving the
economy might be working.
    The GfK consumer sentiment indicator, based on a survey of 
2,000 Germans, rose to 9.9 points in September from 9.7 in the
previous month. The reading beat the consensus of a Reuters poll
of analysts which had forecast the indicator to remain unchanged
at 9.7.
    Household spending has become an important pillar of support
in Germany as its exports falter. Domestic demand is boosted by
record-high employment, above-inflation pay increases and low
borrowing costs.
    Earlier this month, the ECB cut rates deeper into negative
territory and promised bond purchases with no end-date to push
borrowing costs even lower, hoping to kick-start activity nearly
a decade after the bloc's debt crisis.
    "The ECB decision has on one hand resulted in an increase in
propensity to buy, and on the other resulted in propensity to
save reaching its lowest level since April 2016," Rolf Buerkl, a
researcher for Nuremberg-based GfK, said in a statement. 
    Buerkl said German consumers were now afraid that banks
could impose penalties on private investors in the future.
    "It will become clear in the coming months whether this is
sustainable," he said, adding that positive consumer sentiment
will depend on the stability of the labour market.  
    The survey was conducted between Sept. 4 to Sept. 16.
    
                                 Oct   19  Sept  19  Oct  18
 Consumer climate                9.9       9.7       10.4
 Consumer climate components     Sept  19  Aug   19  Sept 18
 - willingness to buy            55.1      48.8      51.6
 - income expectations           46.8      50.1      54.8
 - business cycle expectations   -9.0      12.0      24.6
 
    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 
consumption. 
    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 
months. 
    The additional business cycle expectations index reflects 
the assessment of those questioned of the general economic 
situation in the next 12 months.

 (Reporting by Riham Alkousaa
Editing by Michael Nienaber and Toby Chopra)
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