Berlin - Despite signs of a deepening economic downturn, German consumer confidence posted a surprise increase, a key survey released Tuesday showed.

The Nuremberg-based GfK market research institute said its forward-looking consumer confidence indicator for December edged up to 2.2 from 1.9 in November.

"Many Germans don't believe yet that they will be significantly affected by the downturn," GfK said, releasing its latest index.

Analysts had expected the index would drop to 1.5 amid a deepening sense of gloom about the outlook for Europe's biggest economy.

German business confidence tumbled to its lowest level in nearly 16 years, the Munich-based Ifo economic institute said Monday.

However, falling oil prices and consequently lower inflation appears to have helped boost the mood among German consumers.

The GfK index gauging consumers' propensity to buy jumped to minus 6.7 from minus 18.2.

At the same time, income expectations rose to minus 6.9 from minus 12.9.

But the index's component measuring economic expectations dropped from minus 27.5 to minus 30.1, which is its lowest reading in about 17 years.

Moreover, the institute said the prospects for consumer confidence would now "very much depend on how deep the recession is and how the labour market will be affected."

German unemployment data to be released Thursday is expected to show the nation's labour market stagnating in November essentially bringing to a end a long run of monthly falls in the numbers out of work. (dpa)