German consumer confidence posts 5th straight gain

BERLIN: German consumers are feeling increasingly optimistic about their future economic prospects, a survey showed Thursday, as Europe's biggest economy begins to emerge from its worst slump in 60 years.

The GfK institute's consumer confidence index rose for the fifth month running to an estimated 3.7 points from 3.4 points the month before, it said in a statement.

"Pessimism about the economy has declined further," said the GfK, which conducted interviews with around 2,000 consumers for the survey.

"Inflation is dwindling and consumers have more cash in their wallets," the institute added.

A separate index measuring consumers' willingness to make big purchases also climbed due to declining prices and a relatively stable labour market.

The index is the latest in a series of positive economic news emanating from Europe's powerhouse.

The closely watched Ifo business confidence index rose Wednesday by the largest amount since the indicator was created in 1991, hitting heights not seen since the collapse of US banking giant Lehman Brothers in September 2008.

And Germany officially escaped the clutches of recession in the second quarter of the year, data released Tuesday showed, with growth of 0.3 percent in the three month to June.

"Whether the positive trend will continue depends on the extent to which the labour market clouds over in the course of the year," GfK said.

"A strong rise in joblessness would certainly weigh on the consumer climate," the institute added.

Although the lid has been kept on job losses by a government scheme offering incentives to firms to put employees on part-time work, unemployment has started to rise and experts have warned that worse is to come.