Consumer confidence in Germany is set to drop further to close the second quarter due to concerns over mounting inflation and the Greek debt crisis, while business confidence remains near a record high, according to The Wall Street Journal. On Wednesday, research group GfK reported that the June consumer confidence index is set to fall to 5.5 from 5.7 in May, down from a three-year peak of 6 that was seen in March. The group’s sub-index for expectations dropped more than a point to 47.3, while the propensity to buy and income expectations dropped about three points and nine points at 31.5 and 25.9, respectively.
The GfK report pointed to rising prices as a chief concern, “Consumers very quickly have the impression that everything is becoming more expensive and their purchasing power is falling.” Meanwhile, the Ifo Institute reported on Tuesday that German business confidence was unchanged in May from the previous month, which halted two months of declines. However, the business climate index was 114.2 at the latest check, which is only down slightly from the record high of 115.4 that was recorded in February. The sub-index of current conditions reached a fresh high of 121.4 in May from 121.0 previously.
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