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Survey: German consumer confidence up slightly

Survey: German consumer confidence up slightly

German consumer confidence is improving marginally despite mayhem on financial markets that has deepened fears of a recession, according to a survey released Tuesday.
The GfK research group said consumers' economic expectations and their propensity to make major purchases both fell this month, and confidence remains low on average. However, their income expectations improved slightly amid falling oil prices and inflation.
The forward-looking GfK consumer climate index for November stood at 1.9 points _ a small improvement on the October level of 1.8. That is the second consecutive slight rise following four consecutive months of declines.
"Consumers have kept a level head amid the sometimes dramatic developments on the international financial markets, and this is particularly true of their income expectations," GfK said in a statement.
While falling inflation means consumers are in less danger of losing purchasing power, drops in energy prices have yet to fuel their propensity to buy, GfK found.
"Fears of the German economy lapsing into recession means consumers remain reluctant to make larger purchases," particularly in the car and construction sectors, it said. "The easing of inflationary pressure has obviously not generated any perceptible stimulus ... with the result that many Germans are playing a waiting game."
Still, GfK noted that relatively few Germans have invested in shares and the job market has remained in good shape _ contributing to a calm reaction to recent turbulence.
Andreas Rees, an economist at UniCredit in Munich, cautioned against reading too much into the marginal rise of the GfK index.
"Despite the latest uptick, the German consumer cannot compensate for the weakness in export and investment activity in the quarters ahead," Rees said. He noted that the index is still far short of its long-term average of 9.3 points _ "and the latest two rises are barely discernible."
"Despite the falling oil price, icy headwinds will blow into the face of German consumers in 2009," with unemployment likely to rise, Rees said. He predicted falls in consumer confidence in the coming months.
On Monday, the Ifo institute's monthly survey of business confidence in Germany _ another closely watched indicator for Europe's biggest economy _ fell to a five-year low.
In mid-October, the government slashed its 2009 growth forecast to 0.2 percent from 1.2 percent, citing uncertainty on global financial markets.
GfK's monthly survey is based on interviews with some 2,000 consumers.


Updated : 2021-04-13 14:49 GMT+08:00