Page last updated at 10:18 GMT, Monday, 25 January 2010

German consumer confidence fades

A German spending spree "seems unlikely"

German consumer confidence is fading, hit by the threat of unemployment, according to a survey.

The GfK market research group consumer climate index stood at 3.2 points in February, down from 3.4 in January.

"In terms of consumption, 2010 is likely to be a more difficult year than 2009", said the group.

Europe's biggest economy contracted by 5% in 2009 - its worst fall for 60 years. GfK reported concern over a slight weakening in economic recovery.

The consumer confidence indicator is based on a survey of about 2,000 Germans.

Saving not spending

"This is confirmation that a growth contribution will not come from private consumption this year," said Klaus Schruefer of SEB.

"The tax cuts are definitely having a stabilising effect, but consumers will save rather than spend a lot of that," argued Mr Schruefer. "The economic recovery will have to come from exports this year," he suggested.

Other analysts suggested that a political debate on whether or not to cut taxes had dented consumers' optimism.

"Looking ahead, a spending spree seems rather unlikely given Germans' inclination to save," said Carsten Brzeski of ING Financial Markets.

Print Sponsor

German economy shrank 5% in 2009
13 Jan 10 |  Business
Germany passes tax relief package
18 Dec 09 |  Business

The BBC is not responsible for the content of external internet sites

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Sign in

BBC navigation

Copyright © 2017 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific