German consumer confidence slips, says Gfk

Image caption,
Analysts expect consumer spending to increase next year

German consumer confidence has slipped slightly as expectations grow that the country's strong recovery will moderate next year, a survey suggests.

The forward-looking Gfk index for January fell to 5.4 from 5.5 in December, surprising some analysts. However, the level still remains high.

Last week, a separate survey suggested German business confidence was at a fresh, 20-year high.

Germany is driving the eurozone's fragile economic recovery.

Strong prospects

Gfk said its latest survey suggested consumers "believe the German economy is well on course for recovery, even if they think the unusually strong momentum over recent months cannot be fully maintained".

It also said that Germans' income expectations and willingness to spend had fallen, although both remained "at an extremely good level".

Analysts were unconcerned about the drop in confidence and argued that the German economy was still in rude health.

"Despite today's drop, German consumer confidence remains high and it looks as if German consumers are finally waking up," said Carsten Brzeski at ING.

"Prospects for the German economy have hardly ever looked better at an end of the year."

The German economy grew by 0.7% between July and September, compared with the eurozone average of 0.4%.

This followed record growth of 2.3% in the previous three months.

This is stark contrast to many European economies that are stagnating or growing much more slowly.

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