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German consumer morale brightens less than expected

·1-min read
FILE PHOTO: The coronavirus disease (COVID-19) outbreak in Germany
FILE PHOTO: The coronavirus disease (COVID-19) outbreak in Germany

BERLIN (Reuters) - German consumer morale improved less than expected heading into October, a survey showed on Wednesday, putting a damper on hopes that household spending in Europe's largest economy will be strong enough to drive a quick recovery from the COVID-19 shock.

The GfK institute said its consumer sentiment index, based on a survey of around 2,000 Germans, edged up to -1.6 heading into October from an upwardly revised -1.7 in the previous month.

The reading missed a Reuters forecast for an increase to -1.0 and followed an unexpected drop in the previous month.

GfK consumer expert Rolf Buerkl said the German consumer climate had stabilized despite a recent rise in new coronavirus infections and the growing risk of another round of lockdown measures to contain the COVID-19 pandemic.

"It seems as if the massive stimulus packages for consumers and companies are the right measures to help Germany get out of the worst recession in post-war history," Buerkl said.

Since March, Chancellor Angela Merkel's coalition government has implemented an unprecedented array of stimulus measures, financed with record new borrowing of some 218 billion euros ($256.15 billion), to cushion the impact of the pandemic.

But Buerkl added that a further improvement in consumer morale was depending on the development of the pandemic and the labour market.

($1 = 0.8511 euros)

(Reporting by Michael Nienaber, editing by Emma Thomasson)