Concerns over drawn-out attempts to form a German government are showing signs of halting this year's rise in consumer confidence, a consumer climate survey by marketing research company GfK showed.
While GfK's consumer climate measure rose to 11.0 points in February from 10.8 the prior month, it expects a 0.2-point drop in March.
"The political turbulence surrounding the formation of a stable, viable government in Berlin may have unsettled consumers, resulting in the atmosphere in February losing the gains it made in the previous month," it said.
GfK's economic expectations indicator fell in February, losing 8.8 points to 45.6 points and erasing almost all of its January gains. Income expectations slipped after rising for two consecutive months, although, at 53.8, the indicator was almost 6 points higher year over year. The propensity indicator fell by 4.1 points to 56.3, retracing its January advance.
Despite the downturn, GfK expects real private consumption to grow by approximately 2% during the year, in line with the 2.1% growth of 2017. The German economy expanded for the eighth year in a row in 2017.
