Mounting belief in an economic recovery and a desire to spend ahead of a planned sales tax hike will lift German consumer sentiment in May to its highest level since November 2001, the GfK market research group said on Wednesday. The forward-looking GfK consumer sentiment indicator, based on a survey of 2,000 Germans, rose to 5.5 in May from an upwardly revised 5.3 in April, the Nuremberg-based group said. "It looks as though belief in the economic upswing is feeding consumers' readiness to give up their longstanding reluctance to spend money," GfK said in a statement. The Munich-based Ifo institute's influential gauge of German corporate optimism is at its highest level since 1991, data published on Tuesday showed. A breakdown of the latest GfK survey showed that a component measuring Germans' willingness to buy rose in April by 15 points to hit 34.5, the highest level since April 1999. "The approaching increase in value added tax (VAT) -- and to a certain extent, the imminent soccer World Cup -- are providing an additional boost to (the desire to spend)," GfK added. Chancellor Angela Merkel's coalition government aims to raise VAT by 3 percentage points on Jan. 1, and economists have forecast consumer spending will accelerate during the year as Germans make big purchases in anticipation of the levy. "The increased desire to spend money may hence reflect less an emotional urge to spend money than a dispassionate consideration to no longer put off what was already planned, given the threat of price increases," GfK said. Germany's hosting of the World Cup from June 9 until July 9 is also expected to offer some support to consumer spending. A GfK gauge of consumers' economic expectations rose to 22.2 in April after dipping the previous month, taking it back towards a near-five year high reached in January. However, a component measuring income expectations slipped for a third straight month, as rising energy costs and debate over welfare reform chipped away at optimism, GfK said. With oil prices reaching a record $75 per barrel last week, economists say business optimism must eventually taper off. Moreover, efforts to reduce unemployment have thus far met with limited success, with the total still close to 5 million. The jobless total rose to a postwar record of nearly 5.3 million early last year, and with lay-offs continuing, analysts say worries about job security are the biggest hindrance to private consumption, which has stagnated in Germany for years. "Whether or not there will be a lasting recovery in domestic demand will depend on the strength of the economic upswing and continuing developments on the labour market," GfK said