German growth to be driven by domestic demand this year: ING Bank
2013-01-31 12:43:55
The improvement in Germany's consumer confidence, as latest data showed, indicates that strong domestic demand should be an important growth driver for the economy this year, ING Bank NV economist Carsten Brzeski said Wednesday.
According to ING Bank, German's consumer spending remained stable as households have possibly taken some comfort from the latest calm on financial markets and improvement in business confidence.
While many consumers in peripheral Eurozone countries are currently eating up their savings to make ends meet, Germans are still in a shopping mood, Brzeski said.
The economist noted that if the latest improvement in the German business confidence really leads to the expected rebound of the economy, the labor market should remain almost unharmed, boding well for private consumption this year.
Latest data from the GfK showed that the forward-looking consumer confidence index increased to 5.8 in February from 5.7 in January, marking the first increase since October last year. Consumers' income expectations and the willingness to buy rose to the highest level since July 2012.