German consumer sentiment to fall further, GfK poll finds

27th April 2011, Comments 0 comments

Consumer sentiment in Germany is set to fall further in May following a decline in April that was the first in 10 months, the GfK economic research institute said Wednesday.

The institute's survey of 2,000 households in Europe's biggest economy resulted in an indexed 5.7 points, a relatively solid level though it marked a decline from 5.9 points the previous month, a GfK statement said.

GfK uses its findings to publish an indexed estimation for the month ahead, and the latest reading might undermine hopes for a rebound of consumption this this to help exports drive German growth.

Price increases, the Japanese nuclear disaster and political unrest in North Africa and the Middle East have all undermined consumer sentiment, GfK said.

German consumer prices gained an average of 2.1 percent in March, the same as in February, and a level that exceeds the European Central Bank's target of just below 2.0 percent.

Of the GfK survey's three main components, two showed declines, notably consumer's assessment of overall economic prospects as well as those of their own finances.

But their propensity to make large purchases remained strong owing to solid economic results by the German economy at present and falling unemployment.

The government has raised its official 2011 growth forecast to 2.6 percent and expects economic activity to expand by a further 1.8 percent in 2012.

Unemployment continues to fall meanwhile, and stood at 7.1 percent of the workforce in March, a level last seen in the early 1990s.

Unemployment figures for April are to be published on Thursday.

© 2011 AFP

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