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 stabilised 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 ($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.