Norbolsa | Germany’s economy may be weak, but households are optimistic. Sentiment is close to the level of February 2022 before the collapse brought about by the war in Ukraine. That mismatch was in evidence on Tuesday when it was revealed that the country was the only major currency area member to suffer a fall in output in Q2.
July survey data showed another improvement in German consumer confidence , which is now just below the level it was at in February 2022, when it fell after the Russian invasion of Ukraine. The confluence between rising wages and weakening inflationary pressures has been marked.
In the first quarter of 2024, German workers experienced a historic rise in real wages due to inflationary pressures that began in 2008. GfK, whose own consumer climate index last month showed an upturn also in Germany, sees better income prospects and slightly brighter purchasing power as key drivers of an improvement in confidence.
