WASHINGTON, D.C. -- As Germany led minimal improvements in GDP growth in the euro area last year, Germans were more optimistic about their national economy in 2013 than they have been since the global economic crisis. The four in 10 Germans who believed their country's economy was getting better led all eurozone countries, far outpacing the region's second-largest economy, France, where only 3% saw things getting better at the time.
As one of the main funding countries for economic bailouts, this recovery in opinions on the country's economy could partly reflect Germans' optimism as the broader European Union economy emerged from recession in the second quarter of 2013. Germans' optimism about the national economy almost recovered to the higher levels seen before the financial crisis of 2008. Though almost half the population (46%) believed the economy was getting worse in 2013, this is an improvement from the 54% who said the economy was declining in 2012 and particularly from the 70% who said so in 2008.
Germans See Better Living Standards
At the same time, Germans' confidence in their standard of living hit its highest point since Gallup started measuring it in 2007. This increasing positivity could be related to Germany's unemployment rate, which is at its lowest point in years and is the second lowest in the EU after Austria. Forty-three percent of Germans said their living standards were getting better, again leading the eurozone in optimism. While a quarter (24%) of Germans felt their standard of living was getting worse in 2013, this was a significant improvement from the 51% who felt this way in 2008.
Feelings About Household Income Flat
While feelings about the state of the national economy and personal living standards improved dramatically, Germans' feelings about their household incomes have remained fairly stable. In 2013, 30% of Germans reported they were living comfortably on their present income and an additional 51% said they were getting by.
These percentages are higher than average for the EU as a whole, where 23% report they are living comfortably and 45% say they are getting by. For both the broader EU and Germany specifically, the percentage of people who report they are living comfortably on their household income has not recovered to pre-crisis levels (in 2007, 34% of EU residents said they were living comfortably).
Germans' stagnant assessments of their household incomes could partially explain the low domestic spending seen in the last quarter of 2013. Economic growth in Germany between the third and fourth quarters was driven primarily by foreign trade, increasing GDP by 1.1%, not by domestic demand, which cut GDP by 0.7%.
Implications
While Germany is largely leading Europe's economic recovery, Germans' household spending is lagging behind, which could hamper how fast the country's economy rebounds. Trade abroad is the main driver of Germany's current economic growth, but the country's domestic market is still an important factor. Germans' somewhat tepid feelings toward their household income suggest that the road to full recovery may be a long one.
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Survey Methods
Results are based on telephone interviews with approximately 1,000 adults, aged 15 and older, conducted in 2006-2013 in Germany. The most recent results are based on telephone interviews with 751 adults, conducted in April 30-June 26, 2013, in Germany. For results based on the total sample of national adults, the margin of sampling error is ±4.2 percentage points at the 95% confidence level. The margin of error reflects the influence of data weighting. In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.
For more complete methodology and specific survey dates, please review Gallup's Country Data Set details.
