* GfK falls to lowest in more than a year
* Economists still expect return to growth in Q1
* Retail association does not see warning sign
(Adds details, background)
BERLIN, Dec 21 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
Germany's economy weathered the three-year euro zone debt
crisis well until it slowed in the third quarter of the year. It
is now expected to contract in the fourth quarter before
rebounding somewhat early next year.
On expectations of a slow winter half of the year, the
government may, however, cut its growth forecast for next year
from its current 1 percent and the Bundesbank earlier this month
slashed its own estimate to a meagre 0.4 expansion.
Economists expect no recession - two consecutive quarters of
contraction - and Ifo research institute, which also cut its
growth forecast, said it did so because the slowdown occurred
later than initially expected, but it would be short-lived.
As exports to key markets have flagged throughout the
crisis, Germany has looked to markets outside Europe - where it
sells about 60 percent of its exports - and economists have
counted on private consumption to make up the shortfall.
Ifo's leading index, which points to developments up to six
months in the future, showed earlier this week that business
morale climbed a second month in a row and that companies expect
their prospects to improve again early next year.
The GfK data showed German consumers' willingness to make
purchases plummeted to the lowest since May 2010 and their
expectations for economic development also fell.
But consumers' expectations for future earnings improved
again after dropping the previous month. While consumers do not
see wages rising strongly, they do expect them to outpace
inflation, which could help return to spending next year.
Low interest rates are also encouraging Germans to spend
their money rather than save as they traditionally tend to do.
"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.
But Germany's retail association HDE said the poll was no
warning sign and demand remained at a good level.
"We expect a stable development for retail in 2013 and stick
to our forecast of nominal growth of 1.5 percent for Christmas
and the whole year of 2012," said HDE spokesman Stefan Hertel.
For a related table, see
(Reporting by Annika Breidthardt; Editing by Catherine Evans)