Wednesday, September 25 07:20:51
German consumer confidence rose to its highest level in six years heading into October, supporting expectations strong consumer spending will help Europe's largest economy to post moderate growth in 2013.
GfK market research group said today its forward-looking consumer sentiment indicator, based on a survey of around 2,000 people, rose to 7.1 going into October from an upwardly revised 7.0 the previous month.
The original September figure was 6.9 and analysts in a Reuters poll had forecast the October reading at 7.0. The strengthening data chimed with other recent releases suggesting gradual but steady growth for the end of the year.
"German consumers are expecting the economy to gain momentum in the next few months," GfK said in a statement. "There is a clear upwards trend."
Germans, traditionally savers, became more willing to spend in September than at any point since December 2006, encouraged by an essentially stable job market and historically low interest rates. Saving appeared less attractive as inflation overtook bank interest rates.
A sub-index tracking consumers' income expectations eased, albeit from a high level, due to rising food prices, which dampened perceived purchasing power.
"It's also possible that some consumers fear further financial burdens due to the euro crisis or tax hikes," the GfK said, referring to the outcome of the German election which was still uncertain at the time of the survey.
Angela Merkel's conservatives romped to victory in Sunday's election, winning 42 percent of the vote, but are in need of a coalition partner after falling just short of a parliamentary majority.
The chancellor appeared headed towards coalition talks with her main centre-left rivals the Social Democrats (SPD), who had campaigned on a platform of tax increases for Germany's highest earners.
Concern over income was offset by strong willingness to buy, which the GfK dubbed "euphoric". ( C ) Reuters