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Tue, Jul 28, 2009 - Page 10 News List

German consumer confidence trends up

AFP , BERLIN

Despite the worst economic crisis since 1945, German consumers are ever more confident in the future and increasingly willing to part with their hard-earned cash, a closely watched survey showed yesterday.

The GfK research group said its forward-looking consumer confidence index for next month rose to 3.5 points from a revised 3 points this month.

A sub-index measuring consumers’ willingness to buy rose dramatically to 25.1 points from 14.5 points last month and from minus 26.2 in August last year.

The institute said low inflation had made consumers more eager to rush out and make purchases, as well as a relatively stable labor market, despite the crisis.

Unemployment figures would play a key role in the future development of consumer sentiment, GfK said in a statement.

“A long-lasting stabilization of the consumer climate will depend on how the labor market develops in the future. If the unemployment figures climb high in late autumn, this will be a test for consumer confidence,” GfK said.

The survey is the latest to suggest that Europe’s top economy could be rebounding from its worst slowdown in recent history.

A study by Ernst and Young that came out in Die Welt daily yesterday showed that two out of three firms in Germany believed the economy would improve by next year, rising to nearly eight in 10 companies seeing a brighter future by 2011.

Moreover, 54 percent of the businesses polled said that Germany was likely to emerge stronger after the crisis than it was before.

On Friday, a closely watched survey by the Ifo institute, measuring the mood among German firms, rose for the fourth month running this month.

Nevertheless, the government still sees Germany — one of the world’s top exporters — shrinking by a record 6 percent this year.

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