German consumer morale drops to lowest in over a year
BERLIN Dec 21 (Reuters) - German consumer morale dropped for the fourth month running to its lowest level in more than a year as shoppers become increasingly wary of the effect the euro zone debt crisis is having on Europe's largest economy.
Market research group GfK said on Friday its forward-looking consumer sentiment indicator, based on a survey of around 2,000 Germans, eased to 5.6 heading into January from a downwardly revised 5.8 in December.
That was below the consensus in a Reuters poll of 27 economists for a reading unchanged from December's originally reported 5.9.
The GfK data also showed that German consumers' willingness to make purchases plummeted to the lowest since May 2010 and their expectations for economic development also fell.
Expectations for future earnings improved again after dropping the previous month, pointing to a short-lived downturn in Germany.
"The German consumers continue to be uneasy," GfK said in a statement. "Especially the debt crisis is leading to a slight decline in economic expectations in December."
GfK said consumers now expected the German economy to go through a weak phase in coming months.
Economists now expect Germany, which had remained largely unscathed during the three-year-long euro zone debt crisis, to contract in the final quarter of this year as a global slowdown and the crisis weigh.
They have pinned their hopes on private consumption, which makes up around 60 percent of German gross domestic product, as exports to key markets have flagged during the crisis.
Low interest rates are also encouraging Germans to spend their money rather than save as they traditionally tend to do.