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German consumer morale highest in 8 years heading into Jan - GfK

Published 19/12/2014, 07:12
© Reuters. People carry bags outside department store on last day of Christmas shopping in Berlin
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BERLIN, Dec 19 (Reuters) - German consumer sentiment hit its highest level in eight years heading into January as shoppers expect Europe's largest economy to gain momentum, a survey showed on Friday.

Market research group GfK said its forward-looking consumer sentiment indicator, based on a survey of around 2,000 Germans, rose to 9.0 going into January from 8.7 in December.

It was the highest reading since December 2006 and beat the Reuters consensus forecast for a reading of 8.8.

"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 it added that crises in Ukraine, Syria and Iraq and the Ebola outbreak continued to weaken the economy.

Shoppers became more willing to buy as falling energy prices drove down the cost of heating oil and petrol, leaving households with more money to spend on other items.

People's propensity to save fell to its lowest level since 1991, when GfK started collecting data for the newly reunified Germany.

On the downside, consumers' income expectations fell, with GfK attributing this to the delicate international situation.

Domestic conditions remain favourable for consumption though, with employment at a record high, wages rising and inflation moderate.

© Reuters. People carry bags outside department store on last day of Christmas shopping in Berlin

(Reporting by Michelle Martin; Editing by Hugh Lawson)

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