FRANKFURT, Germany, Dec 20, 2023 (BSS/AFP) - German consumer confidence rose again heading into January thanks to expectations of higher salaries, although it still remained weak, a key survey showed Wednesday.

Pollster GfK said its forward-looking survey of around 2,000 people rose to minus 25.1 points, an increase of 2.5 points compared to December.

The institute said there could finally be some "light at the end of the tunnel" for consumers in Europe's top economy, which has been battling through a weak period.

Inflation fell to 3.2 percent in November, way down on highs seen last year, relieving pressure on struggling households and businesses.

In particular, consumers' expectations when it comes to salaries have stopped declining, due to expected wage increases aimed at coping with higher prices, GfK said.

But Rolf Buerkl from GfK said that it "remains to be seen whether the current rise is the beginning of a sustained recovery," adding the overall reading of the survey was still low.

"Geopolitical crises and wars, sharply rising food prices and the discussions surrounding the national budget for 2024 continue to cause uncertainty."

Germany's top court ruled last month the governing coalition had broken rules on taking on debt, leaving their spending plans in disarray and prompting a scramble to hammer out a new budget for next year.

A deal was clinched between the three parties in the coalition last week. But savings will have to be made, and observers have warned the crisis is likely to weigh on German growth next year.

Last week, the German central bank slashed its growth forecast for next year to 0.4 percent, from a prediction of 1.2 percent in June.