Frankfurt - Consumer confidence in Germany is on the rise as households feel that robust domestic demand, rising wages and low inflation will keep Europe's biggest economy on a growth path, a poll found on Wednesday.
"In contrast to the weather, German consumer sentiment is showing itself from its sunny side," market research company GfK said in a statement.
"The favourable consumer climate is being driven mainly by the excellent domestic economic conditions, such as the high level of employment, very good income developments and the near absence of inflation," it said.
Nevertheless, there were some risk factors, GfK noted.
"It remains to be seen what effect Brexit will have on the European and the German economies," the institute, referring to the British vote last week to quit European Union.
"If it leads to longer-term volatility on the stock markets, or in the political leadership of the EU and of Germany in particular, it could damage sentiment among German consumers," it warned.
Looking to July, GfK's headline household confidence index was forecast to rise to 10.1 points from 9.8 points in June, the institute said.