Consumer confidence hits year high
German consumer confidence hit its highest level in a year, data showed on Tuesday, fuelled by households' rising income expectations despite the eurozone debt crisis.
Market research company GfK released its latest index of household confidence, with the barometer forecast to rise fractionally to 6.0 points in March from 5.9 points in February, a statement said. That will bring it to its highest level since March 2011.
"Overall, consumer sentiment remained stable in February. While both economic expectations and consumers' willingness to spend slipped slightly, income expectations rose perceptibly," GfK said.
The headline consumer confidence index is based on responses from around 2,000 households with regard to their expectations about pay and the economy as a whole in the coming months, as well as their willingness to spend money.
Economy Minister Philipp Rösler hailed the seemingly unstoppable rise in consumer confidence.
It showed that "the domestic stimuli for the economy remain intact," Rösler said. "The German economy is continuing to excel in a very difficult environment in Europe."
Germany has indeed managed to shrug off the worst of the eurozone debt crisis thanks to deep structural reforms implemented in recent years, notching up robust growth of 3.0 percent last year, while unemployment fell to record lows.
And with unemployment set to remain low, domestic demand is expected to be able to offset any weakness in exports resulting from the debt crisis, economists say.
"It looks as if nothing can shatter German confidence. For the time being at least, the eurozone's biggest economy looks like a country full of optimists," said Carsten Brzeski, senior economist at ING Belgium.
The GfK barometer was "continuing its non-stop rally since September. This bodes well for a further stabilisation of private consumption throughout 2012," the analyst said.
Last week, another leading indicator, the Ifo business climate index, rose for the fourth time in a row in February, hitting its highest level in seven months as robust domestic demand helped protect the German economy against the debt crisis.