Latest data released by GfK - 23 July 2020
- Prior -9.6; revised to -9.4
German consumer morale improved better-than-expected, as GfK notes that the boost is helped by a temporary cut in VAT by the government to bolster the economy. This reflects a continued recovery in economic sentiment, but caution still needs to be heeded.
GfK says that:
"There is no doubt that the reduction in VAT has contributed to the extremely positive progress. It is clear that consumers are looking to make major purchases earlier than planned, which will help boost spending this year."
Before warning that the effect could be temporary as consumers might scale back purchases once the reduced VAT rates expire at the start of next year.
