BERLIN/PARIS (Reuters) – Consumer morale in Germany, France and Italy rose unexpectedly at the start of the year, data showed on Wednesday, suggesting that shoppers are ready to open their wallets and support overall growth in the three biggest economies of the euro zone.
The surprisingly solid figures are likely to please European Central Bank President Christine Lagarde, who has called on the single currency bloc to create more of its economic growth at home if it is to withstand headwinds from abroad.
In Germany, Europe’s largest economy, the GfK institute said that its consumer sentiment indicator, based on a survey of some 2,000 Germans, rose to 9.9 points heading into February from 9.7 in the previous month. This confounded a Reuters poll prediction for a reading of 9.6.
GfK researcher Rolf Buerkl said the partial agreement reached in the trade dispute between the United States and China was good for sentiment in Germany, which as an export nation remains highly dependent on the free exchange of goods.
Washington and Beijing earlier this month reached a truce in their 18-month trade war, which had slowed global economic growth and increased business uncertainty.
A stronger propensity to buy, stable employment and bright income expectations also helped foster the more cheerful mood among German consumers, GfK said.
For 2020 as a whole, GfK expects private consumer spending in Germany to grow by 1% in real terms, helped by record-high employment, inflation-busting pay hikes and low interest rates.
“The positive start of the consumer climate in 2020 confirms our assessment that private consumption will continue to be an important pillar of the German economy this year,” Buerkl said.
In France, the second-biggest economy in the euro zone, consumer confidence rose unexpectedly in January despite major strikes against pension reform grabbing headlines and causing transport chaos through much of the month.
The INSEE official statistics agency said its monthly consumer confidence index rose to 104 from 102 in December, when it hit the lowest level since July as massive transport strikes erupted. Economists polled by Reuters had on average forecast that the index would hold steady.
Strikes against the biggest overhaul of the pension system since World War II shut down much of the French public transport system for weeks in December and January.
Nevertheless, INSEE’s survey found that households were less pessimistic about their future finances and were more likely to consider that times were opportune to save more. Households’ fears about unemployment also remained low.
In Italy, consumer confidence this month rose to 111.8 from 110.8 in December, higher than a median forecast of 110.5 registered in the Reuters’ poll.
The latest data comes against a backdrop of continued sluggish growth in the euro zone’s third largest economy.