German consumer confidence robust: Poll

German consumer confidence remained robust, as it discounted fears of a euro zone recession, according to a new poll.

"Even though the European Commission has forecast a recession for the euro zone this year, German consumers are not letting this sour their optimism," market research company GfK said in a statement.

"The source of their optimism is the favourable and stable framework conditions in Germany. The high level of employment, favourable wage agreements and slowing inflation are buoying sentiment," it said.

GfK's household confidence index was projected to increase to 6.5 points in June from 6.2 points in May, according to a statement.

Both economic and income expectations were up and consumers' willingness to spend continued to remain at high levels.

The headline consumer confidence reading was based on responses from about 2,000 households as regards their expectations about pay and the economy as a whole in the months ahead, as also their willingness to spend money.

Earlier this month, the widely-watched ZEW investor confidence index saw stabilisation after a sharp decline in the previous month, thanks to the decision of the European Central Bank to cut interest rates.

The latest Ifo business climate index, an even more important barometer of sentiment in Europe's biggest economy, was scheduled for release later today.

The 0.8 per cent rise in German household consumption in the first three months came as the only positive contribution to growth in the first quarter, according to German statistics office Destatis. It helped the country to eke out 0.1 per cent growth, following a 0.7 per cent contraction in the final three months of 2012.

The second estimate of GDP confirmed an initial reading, and meant Germany narrowly avoided a technical recession, which has been defined as two consecutive quarters of economic contraction.

According to Carsten Brzeski, an economist at ING, German consumers remained the silent helpers of the economy. Often forgotten, ignored and labelled as had-beens, German consumers had become an important growth driver, he said, adding, in fact private consumption grew in each quarter since 1Q 2012.

According to Destatis, first quarter growth was pulled down by the harsh winter weather, and public sector spending fell by 0.1 per cent and investment tumbled 2.4 per cent while imports were down 2.1 per cent and exports shrunk by 1.8 per cent.

There were, however, several signs that the German economy had improved in recent months, as business confidence increased more than expected in May, with businesses becoming more optimistic about the future.