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Consumption

German consumers willing to spend more on goods and services

Market researchers have said they expect German consumers to spend even more at the beginning of next year as employment in the country remains robust. But low yields on savings are also part of the equation.

German consumers were looking to the next year with a lot of confidence, the GfK market research group said Friday.

Its closely watched indicator gauging people's willingness to buy goods or pay for services rose by another 0.2 percent in its January projection to reach 7.6 points.

GfK researchers pointed out it would be the highest confidence level since August 2007, that is, before the global financial crisis started shocking markets.

No time for misers

As economy grows, Germans spend

GfK attributed the continuously good mood among German consumers to a stable job market and wage hikes in a number of industries leaving people with more in their pockets.

"But domestic demand has also been fuelled by record-low interest rates, making it unattractive for people to save large amounts of money and then see their marginal yields being more than just erased by inflation," the group said in a statement.

It expected private consumption in Germany to rise by about 1 percent throughout 2013. With the German economy forecast to expand by just 0.5 percent, domestic demand would turn out to be the major pillar of growth in the country.

hg/kms (AFP, dpa)

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