The euro zone financial crisis and the euro's fall has begun to weigh on consumer sentiment in Germany, Europe's biggest economy, the GfK research group said today.
The group's consumer confidence index, a survey of around 2,000 people, slipped to 3.5 points for the month of June, from a revised 3.7 points in May.
Germans, who typically set more aside in savings than they spend, are worried their nest-eggs will be crushed if the single European currency plunges or if inflation begins to pick up.
GfK also found Germans have less confidence that the economic recovery will be solid, and feel government efforts to rein in spending will not be good for personal incomes. They also fear tax hikes, the research group found.
Germany, the world's second biggest exporter, has come under pressure from its euro zone partners and from Washington to do more to boost consumer demand in order to reduce its large trade surplus.
Bundesbank positive on German outlook
Germany's central bank says the country's economic recovery has accelerated in recent months, fuelling expectations it could raise its growth forecast for Europe's biggest economy.
Following a sharp slowdown during a particularly difficult winter, the economy will pick up again at a much more sustained rhythm, the Bundesbank said in its monthly report for May.
German industrial production in particular 'will markedly accelerate the movement' and exports will once again play a leading role, the bank said.
The bank said companies would benefit from their presence in non-European countries currently recording strong growth rates, especially China.
The Bundesbank also said German exporters were benefiting from the euro's recent fall.
In the construction sector, the central bank forecast a rapid pick-up in activity owing to a high level of orders.
The central bank's overall positive outlook suggested it could raise forecasts for economic growth, which are to be revised in June. The Bundesbank currently expects growth of around 1.6% this year and 1.2% in 2011. Several economists have already forecast German growth of 2% or more this year.
