[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Thursday, 27 October 2005, 11:27 GMT 12:27 UK
German consumers more optimistic
Shoppers in Bonn, Germany
German shoppers may be about to open their wallets
German consumer sentiment has risen unexpectedly on optimism over the success of the forthcoming "grand coalition" government, a survey says.

The latest forward-looking monthly data from the GfK market research group showed its confidence index for November rising to 3.4.

This was up from 3.1 in October, and beat market expectations that the indicator would be unchanged.

The survey also found that people saw the general economy improving.

Negotiations are continuing to form the new German government under Chancellor-designate Angela Merkel.

Her Christian Democrat conservatives are set to lead an administration which will also include the left-leaning Social Democrats.

'Distinct improvement'

"The results [of the survey] suggest that consumers have a positive attitude towards the likely next government," said GfK.

The political scene has developed from stalemate into an expectation that the grand coalition could solve many problems
Anfred Kurz, Bayerische Landesbank

"There is a noticeable rise in the number of people expressing confidence in relation to overall economic development, as well as their individual finances."

GfK polls around 2,000 people on their views about the economic outlook, their hopes for income and the likelihood that they will make big purchases in the future.

It found that for the third month in succession, the sub-index measuring consumer expectations for overall economic development rose "distinctly".

This has now reached plus 1.4 points, the first time it has been above zero since February 2004.

Cautious outlooks

Consumers' income expectations also rose, with GfK adding that people were now beginning to accept this year's sharp rises in energy prices.

Chancellor-designate Angela Merkel
Angela Merkel will lead the new coalition government

Analysts broadly welcomed the survey, but some still cautioned that with German unemployment not far below the five million mark, the economy still had a lot of ground to recover.

"The political scene has developed from stalemate into an expectation that the grand coalition could solve many problems," said Anfred Kurz at Bayerische Landesbank.

Other analysts said consumers may simply be planning to spend more ahead of Ms Merkel's election pledge to raise Value Added Tax (VAT).

And Germany's six leading economic think tanks still expect private consumption to decline during both 2005 and 2006.


FROM OTHER NEWS SITES:
Irish TimesSPD, CDU agree to save 49bn - 26 Oct 2005
* Requires registration
The BBC is not responsible for the content of external internet sites


SEE ALSO:
Mood of German consumers improves
29 Aug 05 |  Business
Fresh fall in German jobless rate
28 Jul 05 |  Business
Germany shows signs of recovery
26 Jul 05 |  Business
Weak euro lifts German confidence
27 Jun 05 |  Business
German confidence at two-year low
26 May 05 |  Business


RELATED INTERNET LINKS:
The BBC is not responsible for the content of external internet sites


PRODUCTS AND SERVICES

Americas Africa Europe Middle East South Asia Asia Pacific