Berlin - German consumer confidence continues to hold up in the face of deepening global economic gloom, a survey released Wednesday said, as falling inflation helped to offset worries about the prospects for Europe's biggest economy.

The Nuremberg-based GfK marketing institute said its forward-looking consumer confidence index came in at 2.2 points in February, which was unchanged from the January reading.

"Recent sharp falls in the inflation rate are currently having a positive impact on the propensity to consume, with the result that the latter demonstrated strong growth at the start of this year," GfK said in a press release.

The GfK component gauging German households' willingness to buy leapt to 15.5 in January from minus 6.3 in December.

With oil prices slumping, annual inflation in Germany slipped to 1.1 per cent in December from 1.4 per cent in November.

Analysts had expected the indicator, which is based on a survey of about 2,000 households to edge down to 2 in February amid a steady stream of bleak economic news from around the world, including mounting job lay offs.

Indeed, income expectations fell for the month to minus 20.5 from minus 15.4 in December, while economic expectations slipped 0.5 to minus 32.9.

Another key survey published Tuesday showed business confidence in Germany also defying the current bleak economic gloom to chalk up its first increase in eight months.

"However," the GfK said, "current announcements regarding cuts in working hours, compulsory leave and the threat of redundancies mean that unemployment is again a growing fear among the employed, and income expectations have declined for the second time in a row." (dpa)