trending Market Intelligence /marketintelligence/en/news-insights/trending/_tRbffMGDhI-MydatrJN1w2 content esgSubNav
In This List

ECB stimulus benefits German economic outlook, but recession risks remain: GfK

Podcast

Street Talk Episode 87

Blog

A New Dawn for European Bank M&A Top 5 Trends

Blog

Insight Weekly: US banks' loan growth; record share buybacks; utility M&A outlook

Blog

Banking Essentials Newsletter 2021: December Edition


ECB stimulus benefits German economic outlook, but recession risks remain: GfK

The consumer climate in Germany was mixed during September as the European Central Bank's stimulus package benefited the propensity to buy, but the risk of a recession could not be ruled out.

Data from market research firm GfK showed that the consumer climate index was stable month over month at 9.7 points in September, and is projected to increase by 0.2 point in October, mainly driven by an improvement in the propensity to buy.

The central bank's decision to lower deposit rates further and resume bond purchases will allow domestic demand to remain a key pillar of the German economy, despite sluggishness across the globe. However, the plan's sustainability will depend on the labor market's stability and whether there is a surge in unemployment, which "would create a significant setback for the consumer economy," GfK said.

The consumers' propensity to buy gained 6.3 points in September to 55.1, while the propensity to save hit its lowest level since April 2016, amid concerns that banks cold impose penalties on private investors.

The economic outlook indicator gained 3 points to stand at negative 9 points in September, though consumers still see Germany at the risk of a recession. Trade tensions with the U.S. and uncertainty around Brexit are the main factors weighing on the German economy, GfK wrote, citing consumers.

The indicator for income expectations lost 3.3 points to 46.8 in September.