Consumer Confidence Rising In Germany

German consumers are in a spending mood this holiday season. And that sentiment will become more pronounced in the new year, market research group GfK has said, as fears over the state of the economy are fading.



Consumer confidence in Germany rose in December and is set to surge to an eight-year high in January, according to a monthly economic survey released on Friday.



A consumer climate index by market research company GfK logged 8.7 points in December and is expected to increase to 9.0 points next month, which would be the indicator's highest reading since December 2006.



Analysts had forecast January's figure to creep up to 8.8 points.



"Evidently consumers currently assume that the phase of economic weakness in Germany will be temporary and are expecting their domestic economy to return to growth over the coming months, GfK said in a statement.



But German consumers expected their incomes to decline, which was "most likely attributable to the ongoing, delicate international situation rather than the framework conditions" in the country, the Nuremberg, Germany-based company said.



The poll was 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.



In line with rising consumer confidence, investor sentiment in Germany also spiked this month, according to Germany's non-profit Center for European Economic Research (ZEW). Furthermore, Munich-based Ifo economic institute said on Thursday business confidence in Germany has increased for the second consecutive month.



el/uhe (dpa, AFP)