Page last updated at 11:16 GMT, Tuesday, 25 November 2008

Consumer confidence up in Germany

A woman walks past a storewindow advertisement showing drastic price reductions in Berlin
Consumers do not appear to be affected by the downturn, GfK says

German consumer sentiment has risen slightly for the third month in a row despite the country being in a recession, a survey has said.

The GfK research firm said its forward-looking consumer climate index rose to 2.2 for December from 1.9 in November.

"The financial crisis may have reached the real economy, but on the whole is not affecting consumer confidence," the research group said.

The rise was partly due to falling oil prices and an industrial wage deal.

Consumers assume that they will not be particularly affected by the economic low

GfK said a 4.2% pay rise over 18 months negotiated by Germany's biggest industrial union had fuelled hopes for "real income rises" in other sectors.

"Consumers assume that they will not be particularly affected by the economic low and believe there is no need to further restrict their willingness to buy at the moment," GfK said.

Meanwhile, the Federal Statistics Office confirmed its preliminary estimates for Germany's GDP, saying Europe's largest economy contracted by 0.5% during the July to September period.

The German economy is now in recession for the first time in five years.

On Monday, the Munich-based Ifo institute said that business confidence in Germany fell in November to the lowest level since 1993.

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