German consumer confidence steady despite debt crisis: GfK


AFP

FRANKFURT–German consumer confidence is holding up in the face of the eurozone debt crisis as rising employment and incomes helped to offset looming recession fears, a poll found Tuesday. GfK released its latest index of household confidence, with the barometer forecast to remain steady at 5.6 points in January, unchanged from Dec., a statement said. “Despite increased economic risks and a further intensification of the debt crisis, Germans are looking to the future positively again,” GfK said. “For the first time in five months, economic expectations have risen. And in line with this, consumers are expecting an increase in income next year.” Nevertheless, in view of the debt crisis, households are showing reticence to spend. “There is a tangible decline in the propensity to buy, even if it is still at a comparatively high level,” GfK said.

The index is based on responses from households about their expectations about pay and the economy as a whole in the coming months, as well as their willingness to spend money. While two sub-indices for income expectations and economic expectations rose compared with the previous month, the third, consumers’ willingness to spend, was down, GfK noted. Another leading indicator, the Ifo business climate index, is scheduled for publication Tuesday. It rose unexpectedly for the first time in four months last month amid signs the German economy — Europe’s biggest — is continuing to perform relatively well despite the international turmoil.