Survey: German consumer confidence stable
BERLIN—Consumer confidence in Germany remains stable despite increasing worries that Europe's biggest economy will be dragged deeper into the region's debt crisis, a survey showed Thursday.
The GfK research institute said its forward-looking consumer confidence indicator for August stands at 5.9 points -- up slightly from 5.8 in July.
Germany's economy has seen two years of solid growth and many workers have enjoyed solid pay increases this year, while unemployment is low -- a contrast with the situation in many other parts of the 17-nation eurozone.
Consumers' economic expectations dropped significantly for a second straight month, GfK said. But their income expectations remained high -- though modestly below last month's level -- while their willingness to buy increased, helped in part by the financial crisis itself.
"The lack of trust in financial markets and historically low interest rates mean that saving money does not appeal," the group said in a statement. "Consequently consumers are more likely to make high-value purchases, such as real estate and also furniture."
Domestic demand has become an increasingly important pillar of Germany's economic strength as debt troubles and austerity programs elsewhere in Europe combine with global economic troubles to cast clouds over prospects for exports, the country's traditional strength.
The German economy grew by 0.5 percent in the first quarter compared with the previous three-month period. But its second-quarter performance is believed to have been weaker, with industrial production and business confidence slipping.
Germany's DIW think-tank estimated second-quarter growth at 0.2 percent and predicted a slight improvement to 0.3 percent in the current quarter.
"Germany cannot uncouple itself from the weak development of the eurozone," DIW economist Ferdinand Fichtner said. But he said better growth in the world economy and above all improving domestic demand should support growth in Germany.