German consumer confidence rose for a third month on retreating inflation and signs the economy is starting to recover.
GfK's sentiment index for August, based on a survey of about 2,000 people, increased to 3.5 from a revised 3 for July, a 14-month high, the Nuremberg-based market-research company said in a statement today.
German business confidence rose more than expected this month, suggesting Europeâ's largest economy is
shaking off its worst recession since World War II. The Bundesbank said on July 20th that the economy shrank "only slightly" in the second quarter after its record 3.8 per cent contraction in the first three months of the year.
"Economic pessimism on the part of consumers has declined," GfK said. "Inflation is disappearing and people have more money in their pockets." As a result, “private consumption currently remains a significant support for the economy."
Germany's inflation rate remained at zero in June, the lowest level in at least 13 years, due to falling energy costs and weakening demand. Oil prices have dropped by more than half from their peak last year.
GfK's measure of economic expectations rose to minus 14 from minus 22.6. A gauge of income expectations increased to 1.8 from minus 3.3 and an index of consumers propensity to spend surged to 25.1 from 14.5.
Reuters
