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Spending spree

Viktoria Kleber / nmDecember 5, 2013

Germans are spending more on Christmas presents this year than ever before. That's cheery news not only for German retailers, but also for the EU Commission and the United States.

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People on the escalator at a shopping mall
Image: picture-alliance/dpa

Books, toys and clothing are the most common items Germans will be putting beneath the Christmas tree this year. And when it comes to their loved ones, there'll be no scrimping. According to a study by the Society for Consumer Research (GfK), Germans intend to spend around 288 euro ($392) on their Christmas presents in 2013. That's three euros more than in the previous year.

More than 80 billion euros in Christmas sales

Retailers can also sense consumers' confidence, and are happy with sales figures from the first days of December. The Retail Association is expecting sales of more than 80 billion euros from Christmas shopping in November and December. That's higher than ever before, and an increase of 1.2 percent over 2012. There are several reasons why money is being spent more freely this Christmas season.

"The general conditions are right for good Christmas sales," said Stefan Hertel from the Trade Association Germany. The employment rate is high, and the economic situation is stable. "People have security and money. And that's why they enjoy treating themselves or their loved ones."

Christmas presents under the Christmas tree
Books, toys and clothings are the most popular Christmas giftsImage: picture alliance/Bildagentur-online/Tetra Images

Low interest rates are one of the reasons why consumers are willing to spend more, said Rolf Bürkl, a market researcher at the GfK. He said there is also another reason Germans are so generous during Christmas, "Many employees get a salary for a 13th month, which they'll gladly invest in Christmas presents."

The Christmas season is seeing a boost in domestic demand, and that's not surprising - German consumer sentiment in the last few months has already reached levels not seen for six years, according to the GfK. With Germans ready to consume more, more will be imported.

Shopping in the face of critics

The United States and the European Commission should also find this news pleasing. In recent weeks Germany has faced criticism because the country's exports exceed imports - this year by around 92.4 billion euros. Strong German exports are endangering the stability of the global economy, and it's something US President Barack Obama and others have blamed on Germany.

A person carrying shopping bags
Consumer confidence is at a six-year highImage: picture alliance/ZB

The European Commission is looking into whether the export surplus represents an economic imbalance and therefore a problem for the whole eurozone. In the worst case, Germany could face sanctions of up to 2.5 billion euros.

But a good Christmas season isn't enough to strengthen German imports in the long term, said Jürgen Matthes from the Institute of German Economy. "It depends primarily on attracting investment next year, and there's a need for economic policy to set clear signals."

Clear signals in policy probably won't emerge until after the Christmas period. Until then, retailers can sit back and enjoy the Germans' buying power. After all, the biggest sales are yet to come. City centers and shopping malls will only get busier as Christmas approaches, because most Germans end up buying their presents - books, toys and clothing - just before Christmas Eve.