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Business

German consumer confidence hits six-year high

German consumers are getting into the mood for extensive Christmas shopping as the domestic economy is expected to gain more momentum. Record-low interest rates see people willing to spend rather than save money.

Consumer confidence in Germany hit a six-year high in December, a closely watched survey by the GfK market research group showed Wednesday, providing good news for retailers across the country as they geared up for the key Christmas shopping period.

The mood among German households jumped to a bigger-than-expected 7.4 points in the GfK barometer, up from 7.1 points in the previous month, with most analysts having forecast a period of stagnation or a slight improvement at best.

"Consumers are evidently expecting the German economy to pick up further and gain even more momentum in the coming months," the research group said in a statement.

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The GfK indicator now stands at its highest level since August 2007 on the back of jumps in both consumers' economic and income expectations.

The domestic economy grew by only a moderate 0.3 percent in the third quarter and thus much slower than in the previous three months, but the growth was still stronger than the euro area's overall performance.

A major reason for German consumers' increased willingness to spend money on goods and services had been a renewed lowering of an already record-low interest rate by the European Central Bank (ECB), making it even less attractive for people to save money.

hg/hc (dpa, AFP, AP)

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