German Consumer Sentiment Hit by Greek Crisis

 
    By Emese Bartha 
 

        FRANKFURT--German consumer sentiment is set to worsen slightly in July for the first time since last October, GfK market research group said in its monthly survey on Thursday, as the Greek crisis weighs on Europe's largest economy.
        The forward-looking GfK consumer sentiment index is set to slide to 10.1 points for July, from 10.2 points in June, coming out slightly short of economists' expectations of 10.2 points in The Wall Street Journal's survey.
        GfK said a Greek debt default and exit from the eurozone, which had previously seemed a remote possibility by experts, now appears to be a very realistic scenario.
        "The previously unsuccessful attempts to find a solution to the debt crisis in Greece as well as the country's impending default now appear to be dampening German consumers' economic outlook," GfK said, adding, "this raises doubts in consumers' minds, because the consequences of Greece's departure cannot be predicted at the moment."
        On Wednesday, the Ifo think tank said German business confidence fell sharply in June, and by more than expected, as companies scaled back their expectations amid Greek concerns. Ifo's business climate index dropped to 107.4 in June, from 108.5 in May, below economists' expectations of a decline to 108.0.
        GfK uses data from the current month to derive a figure for the forthcoming month. Regarding one of the three sub-indexes, economic expectations slid sharply to 24.9 in June from 38.3 in May.
        The dampened economic confidence doesn't appear to affect consumers' income, as this sub-index increased to 57.2 in June from 52.0 in May, hitting a new record since German reunification.
        The third sub-index, "willingness to buy," declined to 57.0 points this month from 62.6 points last month, but remains at a very high level, GfK said.
        "The current economic uncertainty could possibly be one reason for the consumers' less than euphoric consumption," it said, but noted that the tendency to save has increased slightly in June.
        -Write to Emese Bartha at Emese.Bartha@wsj.com
        (END) Dow Jones Newswires

        June 25, 2015 02:00 ET (06:00 GMT)

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