German consumer spending has growth potential of 1.5 per cent in 2008 after expanding by only about 0.5 per cent in 2007, the GfK market research group said on Sunday.
GfK Chairman Klaus Wuebbenhorst told Die Welt newspaper in an article to appear on Monday the retail and travel sectors would be the main beneficiaries of the increase in consumer spending next year.
"We see a growth potential for consumption of up to 1.5 percent," Wuebbenhorst said. He said there were a number of indicators supporting that bullish view.
"Unemployment will continue declining and workers' unemployment insurance contributions will fall -- these sorts of things have a positive impact on sentiment," he said, noting Germans will have 700 euros more per capita in disposal income.
On the other hand, unemployment and fears of joblessness are the main brakes on consumer spending growth.
"Workers are feeling fairly secure in their jobs at the moment and now they want to treat themselves to something," he said. "I see the savings quota falling slightly.”
The German economy, Europe's largest, is expected to grow around 2 per cent in 2008, with economists predicting households will take over as a motor of economic growth in coming years as unemployment falls. (Reuters)
GfK head sees German consumer spending upturn in 2008