Daily Research News Online no. 6489 - German Confidence Could Turn Corner; India's Remains High

German Confidence Could Turn Corner; India's Remains High

February 26 2007

A 'rush of economic optimism' and a continuing rise in income expectations has slowed the fall in GfK's German consumer climate index, while India still has the world's most confident consumers according to ACNielsen's 46-country study.

GfK says its consumer climate survey for February 2007 shows the overall indicator down to a forecast of 4.4 points for March from 4.9 points for February. The fall is almost entirely driven by a continuing decline in propensity to make purchases, and GfK is itself optimistic that this will bottom out in the second quarter bringing stability back to the index.

German consumer expectations of a strong and sustainable economic upturn gathered pace in February, rising 15.8 points to 53.3, a little short of the high of 58.9 points in August 2000. Good news on employment is the biggest driver: in January this year, the number of unemployed was almost 800,000 down year-on-year.

The index of income expectations rose 8 points to add to January's eleven, and broke back into the black at 2.9 points. The effects of the VAT increase were far less severe than feared and the anticipated price shock effect has not materialized, but consumer uncertainty regarding its real impact 'has not yet evaporated' says the Group. In February, the propensity to buy indicator once again dropped almost 11 points to stand at �16.

Findings are taken from the 'GfK consumer climate MAXX' survey, which is based on around 2,000 interviews conducted each month on behalf of the EU Commission. The global group is online at www.gfk.com .

Meanwhile India continues to 'ride the crest of an economic boom' according to Sarang Panchal, Executive Director, AC Nielsen, South Asia, reporting 6-monthly results from the firm's 46-country Consumer Confidence Index. India led the chart for the fourth half-year in a row and scored an all-time-high Index of 137, with the Norwegians second (134) and the Danes third (129).

Indians are feeling exceedingly bullish about the job market (95% rating it excellent or good) as well as the state of their personal finances in the next year (87%). The company is online at www.acnielsen.com .