Consumer confidence stabilises in Germany

Consumer confidence stabilises in Germany
Photo: DPA
German consumer confidence increased in January despite the global financial crisis and reports that the country has entered its worst recession since World War II, Nuremberg-based market research institute GfK reported on Wednesday.

The institute’s consumer climate indicator predicted an index of 2.2 points for February, the same rating that January received and a sign that it is stabilising, though it is still low, the institute said.

A part of the survey found Germans were more willing to spend money but worried about losing their jobs or being put on shorter working hours made them gloomy about their earning prospects, the GfK said.

The survey also found consumers pessimistic on immediate prospects for the economy although findings suggested consumers thought the worst might be over.

The job market will be a “top theme” for consumers in the development of the economy for the next year, GfK expert Rolf Bürkl told news agency DPA, adding that inflation will not be as much of a factor. “The fear of joblessness has always emerged as a brake on consumerism,” he said.

Lower inflation has been good for consumer disposition, he said. “The low petrol prices make for a good atmosphere,” Bürkl said, adding that the government’s efforts at financial rescue packages have also been a relief.

The German economy is expected to contract by around 2.25 percent this year due to a slump in global demand for goods from the world’s largest exporter.

On Tuesday the German cabinet approved a €50-billion stimulus package that promises to pump funds into infrastructure in hopes of stemming a recession.