Germans' spending mood fades

German market research group GfK reported Friday that German consumers increasingly feared geopolitical tensions might hurt the country's economy.

Consumers' slumping moods, GfK said, were reflected by a fall in its forward-looking Consumer Confidence Index from 8.6 points in September to 8.3 points in October.

"It is above all the various international crises which are behind a slowdown in the consumer climate at present and the first signs of uncertainty are beginning to show among German consumers," GfK said in a statement.

The GfK index is based on a survey of about 2,000 households, and this month marked the second consecutive decline in the German consumer climate. German's concerns for a weakening economy translated into falls in both their income expectations and their willingness to spend in the coming months.

GfK said it couldn't rule out that consumer sentiment may worsen further amid mounting international tensions, undermining "excellent general economic conditions" in Germany.

"In this case, there is a danger that private consumption would no longer fulfill its role as a key pillar of the German economy," the GfK statement concluded.

Private consumption has shored up the German economy in recent months as exports were sluggish amid the faltering recovery in the eurozone and sluggish global demand. In the second quarter, Europe's largest economy even contracted, but hopes were high for a rebound later in the year.

Weaker consumer confidence is plunging this in doubt, adding to worries coming from businesses this week. On Wednesday, the country's closely-watched Ifo Business Confidence Index slumped to its lowest level in 17 months, also being dragged down by mounting global tensions.

uhe/chc (AFP, dpa, Reuters)