July 27, 2017 / 10:46 AM / in 4 months

Economic euphoria propels Merkel towards fourth term

BERLIN (Reuters) - German consumer morale hit a 16-year high, data showed on Thursday, the latest piece of positive economic news to boost prospects for Chancellor Angela Merkel as she prepares to seek re-election in September elections.

FILE PHOTO: German Chancellor Angela Merkel arrives for a TV interview by ARD public broadcaster in Berlin, Germany July 16, 2017. REUTERS/Hannibal Hanschke/File Photo

Market research group GfK’s consumer sentiment indicator rose 0.2 percentage points to 10.8, its highest level since October 2001.

It echoed similarly positive business morale trends. The Munich-based Ifo economic institute said on Tuesday its business climate index hit a record high in July.

With Germany going to the polls on Sept. 24, the economic picture augurs well for Merkel, who is seeking a fourth term in office, burnishing the conservative’s 13-point poll lead over her Social Democrat rivals.

“The German economy is now firing on all cylinders,” Rolf Buerkl, a researcher for Nuremberg-based GfK, said in a statement, with consumers expecting further improvements over the remainder of the year.

Germany’s manufacturing economy is also in rude health, anticipating a surge in already robust exports.

With unemployment hitting new lows each month, Merkel’s Social Democrat challenger Martin Schulz has struggled to gain traction with a message focusing on the ills of inequality. He is refocusing his campaign on the risk of a rekindled refugee crisis.

Schulz, who heads to Italy for a meeting with Prime Minister Paolo Gentiloni and to visot a Sicilian refugee camp visit on Thursday, has warned that Germany is heading for a repeat of the 2015 flood of almost a million Syrian war refugees arriving in Germany, the toughest moment in Merkel’s 12-year premiership.

Reporting By Thomas Escritt Editing by Jeremy Gaunt

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