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German consumer morale inches higher going into May: GfK
[BERLIN] Morale among German consumers edged higher heading into May, helped by expectations that incomes will rise, a survey showed on Thursday, but continued uncertainty over Greece slightly dampened their willingness to spend.
The GfK consumer sentiment indicator, based on a survey of 2,000 Germans, inched up to 10.1 in May from 10.0 in April.
This was the highest reading since October 2001, but fell short of the Reuters consensus forecast for 10.2. "The consumer climate has improved, but not as strongly as in recent months," Rolf Buerkl, a researcher for Nuremberg-based GfK, said in a statement.
Private consumption has overtaken exports as Germany's main engine of growth with inflation-busting pay rises and ultra low interest rates making consumers more willing to open their purse strings.
Gfk said income expectations were at their highest level since reunification in 1990.
However, the survey showed that German consumers had become slightly less optimistic about the economic outlook than in the previous month, even though leading economic institutes have raised their growth forecasts for this year. "Evidently consumers are now starting to be affected by the constant back and forth on Greece's future in Europe," said Buerkl.
German consumer willingness to make purchases also fell for the first time in six months, although it remained at a high level thanks to record high employment and rock-bottom interest rates.