Consumers More Confident

The consumer sentiment index that the Nuremberg-based GfK market research institute calculates each month is forecast to edge up to 4.4 points in April, from 4.3 points in March, the think tank said in a statement on Wednesday.

"The period of weakness in the consumer climate appears to have come to an end, at least for now," the GfK said.

The renewed rise in consumers' willingness to spend was causing the change, according to the institute.

The improvement in consumer sentiment in Germany also follows signs of a pickup in the nation's unemployment rate and the prospects of higher pay settlements this year after a protracted period of weak wage growth.

Rosier outlook

Economists expect data to be released Thursday that will show seasonally adjusted unemployment in Germany falling by 50,000 in March after a 79,000 fall in February -- with employers hiring more in the wake of the economic upswing that started last year.

"The rosier outlook for jobs also led consumers to hope that the collective wage bargaining and salary rises would be higher in some industries this year than in past years," the GfK said.

Based on a survey of about 2,000 consumers, the GfK's poll measuring consumers' propensity to spend rose to minus 12.3 from minus 16, while an index measuring income expectations jumped to 15.9 from 2.9. Income expectations also rose.

Coming in the wake of Tuesday's surprise rise in German business confidence, the GfK index is the latest sign that the increase in the country's VAT from 16 to 19 percent in January has had only a minimal impact on the nation's economy.

The GfK also found that households are more optimistic with regard to their future income than they have been in five and a half years, with that sub-index rising by 10.1 points to plus 13 points.