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Business

German consumer confidence hits six-year high

Germans are still willing to spend more on goods and services. A fresh study by a leading market research group has shown consumer confidence at levels not seen in years, but uncertainties remain.

The Nuremberg-based GfK market pundits reported Wednesday their closely watched German consumer confidence barometer rose by another 0.1 percent for October to reach 7.1 points, marking a six-year peak.

The researchers emphasized the results of Germany's September 22 general election had no influence on the index as the poll among some 2,000 households across the country was completed earlier.

Consumer confidence data came a day after the Ifo think tank announced German executives were also in a good mood and expected their businesses to thrive in the rest of the year.

Mixed picture

"German consumers share managers' expectations that the domestic economy will pick up in the months ahead," GfK market expert Rolf Bürkl said in a statement.

The group's sub-index gauging consumer expectations climbed by almost nine points to 10.7 points, seeing Germans willing to spend even more on goods and services than they did in early 2007 shortly before the introduction of a value-added tax rise from 16 to 19 percent.

However, consumers appeared uncertain about their future financial situation, citing inflation worries especially in the food sector as well as imponderables with regard to what a new German coalition government might come up with in terms of new taxes.

Nonetheless, GfK experts expected private consumption to rise by one percent throughout the current year, which would make it a central pillar of domestic growth set to expand by less than half a percent in 2013.

hg/ rg (dpa, Reuters)