BERLIN – German consumer sentiment is likely to worsen in September due to households’ concerns that market turmoil and higher food prices may hurt the economy and erode purchasing power, a survey showed yesterday.
The GfK market research group’s forward-looking sentiment indicator for September, based on a survey of around 2 000 Germans, fell to 7,6 from a downwardly revised 8,5 for August. The reading was the first fall in six months and the lowest since June, the Nuremberg-based group said.”The turmoil on financial markets has obviously had quite a negative impact on consumer sentiment, even though Germans aren’t as caught up in the stock market as say the British or Americans are,” said Unicredit economist Alexander Koch.Economists polled by Reuters last week had forecast the index would fall to 8,5 from a previously reported 8,7 in July.The consumer sentiment index could resume its upward path if talk of big price rises ends and if the turbulence seen in financial markets this month ceases, the GfK said.”If this is not the case, lasting damage to the consumer climate cannot be ruled out,” the group added in a statement.German anti-trust officials said earlier this month they were examining a recent jump in milk prices on suspicion of possible price-fixing.The financial market turmoil weighed on business morale in August, a survey by economic think tank Ifo showed on Tuesday.The German economy has already slowed this year.Growth eased to 0,3 per cent on the quarter in the April-June period from 0,5 per cent in the first three months of 2007, held back by a dip in construction investment.Foreign trade and equipment spending were, however, brisk and the German exporters’ association said earlier this month business was not being hurt by the fears of a global liquidity crisis that have knocked financial markets.A GfK gauge of consumers’ expectations for the economy fell to 48,4 from 64,8 in July.The components lag the headline indicator by one month.A GfK measure of income expectations dropped to 9,2 from 27,9 in July.A separate gauge of consumers’ willingness to buy dipped to 6,4 from 9,0 in July.Sebastian Wanke, an economist at DekaBank, said consumer spending would support.Nampa-ReutersThe reading was the first fall in six months and the lowest since June, the Nuremberg-based group said.”The turmoil on financial markets has obviously had quite a negative impact on consumer sentiment, even though Germans aren’t as caught up in the stock market as say the British or Americans are,” said Unicredit economist Alexander Koch.Economists polled by Reuters last week had forecast the index would fall to 8,5 from a previously reported 8,7 in July.The consumer sentiment index could resume its upward path if talk of big price rises ends and if the turbulence seen in financial markets this month ceases, the GfK said.”If this is not the case, lasting damage to the consumer climate cannot be ruled out,” the group added in a statement.German anti-trust officials said earlier this month they were examining a recent jump in milk prices on suspicion of possible price-fixing.The financial market turmoil weighed on business morale in August, a survey by economic think tank Ifo showed on Tuesday.The German economy has already slowed this year.Growth eased to 0,3 per cent on the quarter in the April-June period from 0,5 per cent in the first three months of 2007, held back by a dip in construction investment.Foreign trade and equipment spending were, however, brisk and the German exporters’ association said earlier this month business was not being hurt by the fears of a global liquidity crisis that have knocked financial markets.A GfK gauge of consumers’ expectations for the economy fell to 48,4 from 64,8 in July.The components lag the headline indicator by one month.A GfK measure of income expectations dropped to 9,2 from 27,9 in July.A separate gauge of consumers’ willingness to buy dipped to 6,4 from 9,0 in July.Sebastian Wanke, an economist at DekaBank, said consumer spending would support.Nampa-Reuters
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