Rising wages, a strong job market and low oil prices have further boosted the mood among German consumers. Confidence has reached its highest level since 2001, but experts warn the air is getting thinner.
German consumer confidence hit a 13.5-year high, as low inflation and a bright economic outlook spurred spendthrift in Europe's biggest economy, a poll found on Wednesday.
"That is the highest level since October 2001. The consumer climate in Germany remains in a moderate uptrend," market research company GfK, which conducted the poll. said in a statement.
The forecast, which measures consumer sentiment for the month ahead, rose to 10.2 points in June, up from 10.1 points in May. This marks the eighth consecutive month of growth in Germany, despite aslowdown in economic activity.
"Very strong domestic demand in Germany and the low rate of inflation are fuelling economic expectations and consumers' willingness to spend," GfK said.
A weaker euro and continually low oil prices bolstered the country's exporters, while rising wages and a robust job market boosted domestic demand. Even then, income expectations dropped marginally from their previous high.
In spite of the solid numbers, the GfK cautioned that external risks could throw a wet blanket on otherwise upbeat consumers.
"Consumer spending is an important engine for economic growth this year. But we mustn't lose sight of the ongoing risks: the difficult talks about Greece's future in the eurozone, the Ukraine crisis and Islamic State terror could seriously dampen consumer spending in Germany," it said.
GfK's Rolf Bürkl added: " It's possible that consumer confidence will continue to grow. But the air is unmistakably getting thinner."
pad/uhe (dpa, AFP, Reuters)