GERMANS appear to have shrugged off concerns about the financial crisis and continue to hope it won't affect them, according to the latest consumer sentiment index.
Preliminary results from the much-watched GfK consumer confidence index show confidence holding steady in October, defying concerns that the sovereign debt crisis could tip Europe into recession.
The Nuremberg-based market research company, which carries out the survey every month, forecasted yesterday that its consumer sentiment index would remain at 5.2 next month. Economists predicted a drop to 5.
German business confidence fell less than forecast this month despite the prospect of a Greek default and heightened uncertainty about Europe's banking system. German unemployment declined for the 26th straight month in August, bolstering household spending power and helping Europe's largest economy to weather slowing global growth.
"Despite rising fears of recession, in Germany the consumer climate should hold its own this autumn," GfK said in a statement. "Given the fact that labour-market prospects continue to be pleasing, expectations of growth in income have again increased."
GfK's gauge of income expectations rose to 35.1 in September from 27.6 in August. A measure of households' economic expectations fell to 4.8 from 13.4, and the index of consumers' willingness to spend dropped to 29.7 from 36.9.