German consumer sentiment surged to its highest level in more than 13 years heading into February, a survey showed today, as lower oil prices meant shoppers in Europe's largest economy had more spare cash.
GfK market research group said its consumer sentiment indicator, based on a survey of 2,000 Germans, rose to 9.3 from 9 in January.
That was the highest reading since November 2001 and beat the Reuters consensus forecast for a reading of 9.1.
"German consumers have evidently also been affected by the major collapse in energy prices over the past few weeks," said GfK analyst Rolf Buerkl.
"Reduced costs of fuel and heating oil are boosting disposable income, giving consumers greater freedom for other spending or purchases," he added.
The survey showed German consumers consider the economy to be picking up and see this continuing in the coming months.
GfK said this was likely due to lower energy prices which, combined with a weaker euro, are acting like an economic stimulus programme.
German consumers were also more willing to make purchases than at any time since December 2006 as they spend less on fuel and heating oil and have little inclination to save due to the paltry rates being offered by banks.
Germans were more optimistic about their future income thanks to the stable labour market and the low inflation rate.
GfK said domestic demand was likely to make an important contribution to economic growth this year, though it noted that there were risks such as crises in Ukraine and the Middle East.
Private consumption, along with foreign trade, drove a 1.5% expansion in Germany's GDP last year.