German Consumers Remain Confident in the Face of Crisis

30 January 2009

NÜRNBERG: Despite the global financial crunch and reports that Germany has entered its worst recession since World War 2, consumer confidence improved in January, reports market researcher GfK.

The firm's consumer climate indicator predicted an index of 2.2 points for February, the same rating accorded to January and a sign that confidence is stabilising – albeit at a low level.

The survey noted that Germans are more willing to spend money, despite concerns about losing their jobs or being put on shorter working hours. But such fears made them pessimistic about their earning prospects, notes GfK.

The study also found consumers pessimistic on immediate prospects for the economy although findings suggested they thought the worst might be over.

GfK executive Rolf Bürkl, in an interview with news agency DPA, opined that the job market will be a "top theme" for consumers in the development of the economy for the next year.

He also ventured that inflation is not a serious concern: "The fear of joblessness has always emerged as a brake on consumerism."

Indeed, lower inflation has been good for consumer disposition, according to Burkl: "The low petrol prices make for a good atmosphere," he said, adding that the government's financial rescue packages have also contributed to consumer relief.

Consumers' relatively bullish [fatalistic?] attitude, flies in the face of forecasts that the German economy will contract by around 2.25% in 2009, depressed by a slump in global demand for goods from the world's largest exporter.

It could be that the public is reassured by the German cabinet's approval earlier this week of a €50 billion ($66.3bn; £46.36bn) stimulus package that will inject funds into the national infrastructure in hopes of stemming recession.

Data sourced from The Local (Germany); additional content by WARC staff