Confidence among German consumers is expected to hold fast at high levels in December, a monthly survey found Tuesday, although the results date from before a spate of political upheaval.

Market research firm GfK (Swiss: GFK.SW - news) predicted the public mood would match November's level of 10.7 on its scale, slightly lower than the results in September and October, based on a poll of 2,000 people.

"Consumer confidence is stabilising towards year's end after two small drops in a row," the pollsters commented in a statement, calling the result "good news" for the important Christmas period.

People were more sanguine about future growth in the German economy -- Europe's largest -- but had slightly lower expectations for their own income and weaker interest in making purchases.

Nevertheless, "it remains to be seen whether the consumer mood could be sapped by the failed talks for a coalition" between Chancellor Angela Merkel's conservatives, the ecologist Greens and the liberal Free Democrats, GfK added.

If it takes a long time to form a government, "uncertainty could grow among consumers as well as among businesses," creating "a risk for the present good mood," the firm said.

In recent days, the Social Democrats have appeared to open up to talks with Merkel on potentially repeating the "grand coalition" of centre-left and centre-right that has ruled in Berlin since 2013.

A deal between Germany's two largest political parties could complete the reassuring picture painted by economic growth -- expected to outstrip 2.0 percent this year -- and historic low unemployment.

But the road to a new government is long, with Merkel's key ally Julia Kloeckner saying that formal negotiations with the SPD are unlikely to begin before 2018.

In a separate survey published Friday, the Munich-based Ifo institute's business confidence index clocked up yet another a new all-time high for November -- although the poll was also carried out before the three-party talks fell through.

Source:AFP