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Business

German consumers confident as more wage hikes likely

German consumers are looking to the future with a great deal of confidence, market researchers have found. Their optimism is above all based on the prospect of higher wages in many industries and bigger pensions.

GfK market researchers said Wednesday their forward-looking consumer confidence index for May indicated Germans' willingness to continue their shopping spree.

The latest monthly barometer climbed to 9.7 points from 9.4 points a month earlier, thus reaching its highest level since September 2015.

"German consumers believe the domestic economy will expand in the months ahead," GfK expert Rolf Bürkl said in a statement. The May reading also showed that people were less worried now about slowing growth in some big emerging economies and its potential impact on German exporters.

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German economy in rude good health

Little point in saving

Domestically, there are a number of reasons why consumers are in such a good mood at present. One of them is record low unemployment, with employees hoping for more wage increases in the course of the year.

Elderly people will also have more money left to spend in their pockets after the government decided to raise pensions by between 4 and 6 percent, depending on whether recipients live in the eastern or western part of the reunited country.

Even more decisive may be the impact of the banks' low-interest policy which has not exactly motivated people to increase their savings as yields are negligible. For many, it continues to make more sense to buy goods and services, including big-ticket items, the GfK's Rolf Bürkl concludes.

hg/cjc (Reuters, dpa)

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