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GERMAN CONSUMPTION BOTTOMS OUT.
(From Market - Europe)
The uptick in private sector spending during the second and third quarters of 2002 has given way to another period of decline, yet the foundation is in place for a sustainable recovery in German private sector consumption in the second half of 2003
The macroeconomic framework for consumption growth is favorable at present, but Germany is suffering from a crisis of confidence. At the household level, confidence is being undermined by unemployment that stubbornly lingers in the range of 9 to 10 percent. Business confidence is hampered most by concerns over geopolitical instability that could drive energy prices sharply upward
Household demand for both durable and non-durable goods has experienced year-on-year losses in recent months, but modest growth should reappear in the second quarter of 2003. Expenditure on non-durables should show year-on-year growth in the range of 2 to 4 percent by the second ...
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