German consumer confidence rises at year-end: survey

20th December 2013, Comments 0 comments

Consumer confidence in Germany rose again during the busy Christmas period, auguring well for Europe's top economy as it goes into 2014, a new poll found on Friday.

"Consumer sentiment is very good at the end of 2013," market research company GfK said in a statement.

"Economic expectations and willingness to spend are continuing to rise. Income expectations have slipped, but are still at very high levels."

Overall, GfK's headline household confidence index was forecast to rise to 7.6 points in January from 7.4 points in December.

This reading is based on responses from about 2,000 households regarding their expectations about pay and the economy as a whole in the coming months, as well as their willingness to spend money.

Sentiment in Europe's top economy is currently very positive.

Earlier this week, the ZEW investor confidence index rose to its highest level in seven and a half years, and the Ifo business climate index hit a 21-month high.

Analysts nevertheless questioned whether consumer confidence would translate into higher retail sales.

"German consumers are becoming more confident as uncertainty fades. The GfK index is at its highest level since 2007," said Berenberg Bank economist Christian Schulz.

"Consumer confidence has been rising strongly since April 2013. However, strong consumer confidence has so far failed to translate into stronger hard consumption data," the expert said.

Retail sales had mostly disappointed and the consumption component of gross domestic product had only grown modestly so far in 2013, Schulz said.

Nevertheless, "with the economy turning up and the anticipation of a new national minimum wage of 8.50 euros introduced in 2015, we continue to expect German consumers to make a healthy positive contribution to GDP growth in 2014 and beyond," Schulz concluded.

© 2013 AFP

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