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Business

Germans spend more, save less despite economic worries

German consumers are set to remain in spending mood next month, the GfK consumer research group has said, although worries about the country's economy are mounting. Fears of inflation are also rife.

German consumer confidence was expected to remain robust in September, the GfK said as it published its forward-looking consumer confidence index on Tuesday.

According to the GfK data, the index came in at 5.9 points for next month, which was unchanged from August and also slightly higher than the 5.3-point index reading of September 2011.

In a statement, the GfK said that private consumption remained a strong pillar of economic growth, adding, however, that consumer sentiment was declining.

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"German consumers' fears of a noticeable weakening of the economy continued to rise - a fact borne out by the third marked decline in economic expectations," GfK said.

However, Germans' income expectations and their willingness to spend showed only moderate declines, which GfK attributed to substantial wage hikes recently and a stable jobs market.

The mood of German consumers continued to be dampened by high fuel prices, the Gfk said, causing rising fears of inflation. Consumers were saving markedly less than in recent years, because of these inflation fears and also in light of the rock-bottom interest rates their savings are currently generating.

"Anxiety about a loss of stability of the single currency is big," the research group said.

GfK's headline consumer confidence index is based on a survey of about 2,000 German households and is published every month.

uhe/msh (AFP, dpa)

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