German consumers finally ready to part with cash

26th April 2006, Comments 0 comments

26 April 2006, BERLIN - German consumer sentiment has climbed again, according to a key indicator released Wednesday, adding to signs that the recovery in Europe's biggest economy is gaining strength.

26 April 2006

BERLIN - German consumer sentiment has climbed again, according to a key indicator released Wednesday, adding to signs that the recovery in Europe's biggest economy is gaining strength.

Drawn up by the Nuremberg-based GfK market research institute, the forward-looking consumer sentiment index rose to 5.5 points in May, after an upward revision of the indictor to 5.3 in April.

Economists had projected that the indicator would come in at five with the survey following in the wake of a bigger-than-expected jump in German business confidence.

"It looks as though belief in the economic upswing is feeding consumers' readiness to give up their longstanding reluctance to spend money," the GfK said.

The increase in both consumer and business confidence in Germany was despite the threat posed by the recent surge in oil prices and expectation of only a very modest improvement in the nation's high unemployment levels.

Based on a survey of about 2,000 Germans, the Gfk consumer confidence report also comes ahead of plans by Chancellor Angela Merkel's government to hike the nation's consumption tax in January next year.

"The increased desire to spend money may reflect less an emotional urge to spend money than a dispassionate consideration to no longer put off what was already planned, given the threat of price increases," GfK said.

DPA

Subject: German news

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