Uncertainty hits German consumers’ mood

FRANKFURT

Confidence among German consumers is ebbing, a regular survey showed on May 24, although major geopolitical upsets have left Europe’s largest economy mostly unruffled.

Pollsters GfK downgraded the June reading of their monthly barometer 0.1 points for the second month in a row, to 10.7.

Nevertheless, geopolitical dangers such as U.S. President Donald Trump’s decision to tear up of a deal designed to hold up Iran’s pursuit of nuclear weapons “did not undermine the mood among consumers” this month, they found.

The German public remained optimistic about the future economic situation and their own income prospects, but were less keen on making big purchases, the survey revealed.

But “the course of the indicator since the beginning of the year shows consumers judge economic momentum in German could ebb somewhat,” GfK said.

In hard figures, economic growth in Germany slowed to 0.3 percent in the first three months, according to preliminary figures from federal statistics authority Destatis. Other indicators - including surveys of investor and business confidence and the purchasing managers’ index - have fallen.

Germany enjoys “extremely good domestic conditions” for further growth.

But the country and its neighbors face geopolitical risks from the West’s confrontation with Russia over the war in Syria, the U.S. withdrawal from the Iran deal with related threats of sanctions against EU firms and the danger of a transatlantic trade conflict.