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German consumer sentiment falls in May

Consumer climate in Germany ticked down in May and is expected to fall further in June but remains at a good level, despite global geopolitical risks that do not seem to have dented German consumers' mood yet.

Market research firm GfK said its consumer climate index decreased to 10.8 points in May from 10.9 points in April, with a further drop to 10.7 points in June. Income expectations increased 0.7 point to 54.2 points in May and consumers' expectations regarding the economy remained stable after decreasing in the previous month. Propensity to buy decreased 4.1 points to 55.9 points from the previous month but remains at a high level.

GfK said private consumption is estimated to increase by about 2% this year because of good domestic conditions, such as rising incomes and employment and moderate inflation.

"A negative impact on trade as a result of U.S. sanctions would have a long-term effect on Germany as an export nation," GfK said. "In this case the good consumer climate experienced to date could be put at risk and the good consumer forecasts would likely become obsolete."