GERMAN consumers are in the mood to shop as they head into August, a key survey said today, crediting the government’s coronavirus stimulus efforts with lifting morale.

The GfK institute’s forward-looking barometer climbed to -0.3 points, the third monthly increase in a row and a large jump on July’s figure of -9.4.

Consumer confidence has been rising steadily since Europe’s top economy emerged from lockdown in May and is fast catching up to pre-pandemic levels.

“German consumers are leaving the corona shock from the spring of this year more and more behind,” the pollsters said in a statement.

The government’s July to December reduction in value added tax as well as the prospect of a 300-euro (RM1,697) bonus per child later this year have encouraged Germans to open their wallets, they said.

Both measures are part of unprecedented stimulus efforts unveiled by Chancellor Angela Merkel’s government to cushion the economic impact from the virus.

Looking in detail at the survey of some 2,000 people, GfK found that respondents were far more optimistic about their own income expectations than in the previous month and more likely to spend money on big-ticket items in the near future.

The pollsters also recorded a slight increase in consumers’ expectations for economic growth, heavily dependent on whether Germany’s infection numbers stay low and a second wave can be avoided.

“Another lockdown would quickly destroy all hopes of an economic recovery,” GfK noted.

The German government expects the economy to shrink by 6% this year before returning to growth in 2021.