FRANKFURT, Germany (AFP) — German consumers are heading into 2023 feeling slightly less gloomy than in recent months, a key survey found Wednesday, as government interventions take some of the sting out of soaring energy costs.

Pollster GfK said its forward-looking survey of around 2,000 people inched up by 2.3 points to reach minus 37.8 points for January, the third consecutive monthly increase.

The more upbeat mood comes as energy prices have eased off after hitting record highs in the wake of Russia's war in Ukraine, and as consumers start to feel the impact of Berlin's 200-billion-euro ($212-billion) energy support package, GfK said.

"The German government's measures to cushion the exploding energy costs are apparently having an effect," GfK's consumer expert Rolf Buerkl said in a statement.

But he cautioned that the index was still at a very low level and the rebound in consumer confidence was on "shaky ground."

"If, for example, the geopolitical situation were to worsen again and lead to a significant increase in energy prices, the light at the end of the tunnel would very quickly dim again," Buerkl said.

The GfK survey is the latest in a series of indicators showing an improved outlook for Europe's largest economy, as hopes grow that a looming recession won't be as bad as initially feared.

Business confidence rose for a third straight month in December, a closely-watched survey by the Ifo institute showed earlier this week.

Ifo now sees the German economy shrinking by just 0.1 percent in 2023, after previously forecasting a contraction of 0.3 percent.
The influential IfW Kiel institute has even predicted that the economy would dodge a recession altogether due to the government relief measures.
The German government said in its autumn forecast that the economy would contract 0.4 percent next year.