Morale among German consumers dipped going into April, as shoppers felt less upbeat about the future of Europe’s largest economy, a survey showed.

The consumer sentiment index put out by the GfK market research group based on a survey of 2,000 Germans dropped to 9.4 heading into April from 9.5 in March. The consensus view of analysts polled by Reuters had been for it to stay at 9.5.

"The weak demand for German products in certain important markets will probably not leave economic growth in Germany unaffected," GfK analyst Ralf Buerkl said, citing economic downturns in the key US export market and China. He said this was reflected by a drop in economic expectations.

The German economy expanded by 1.7 per cent in 2015, its strongest rate in four years, driven by robust private consumption and higher state spending on refugees. Consumers have benefited from real wage growth, with the Statistics Office saying on Tuesday that real wages rose 2.4 per cent last year compared with 2014, the biggest increase since 2008.

Consumption is expected to keep boosting growth this year thanks to a stable labour market, rising real wages, low inflation and rock-bottom interest rates.

But the GfK survey nevertheless showed a drop in sub-indices reflecting income expectations and propensity to buy. Still, the research group said both indicators remained at extremely high levels in contrast to the sub-index for economic expectations.

On Wednesday, Germany’s government panel of economic advisers revised down their 2016 growth forecast by 0.1 percentage points to 1.5 per cent this year on global economic uncertainties. But GfK confirmed its estimate that private consumption would rise by around 2 per cent in real terms this year, in a sign that consumers will continue to support solid German growth in 2016.

Reuters