German consumers feeling more pessimistic: survey
GERMAN consumers are heading into November feeling more downbeat than a month earlier, a key survey showed on Tuesday (Oct 24), as still-elevated inflation and an industrial slowdown weigh on Europe’s top economy.
Pollster GfK said its forward-looking survey of around 2,000 people fell to minus 28.1 points, a decrease of 1.4 points from the previous month, marking the third straight decline for the gauge.
“Hopes for a recovery in consumer sentiment this year must be definitively abandoned,” GfK’s consumer expert Rolf Buerkl said in a statement.
“In particular, high food prices are weakening purchasing power of private households in Germany, and mean that private consumption will not be a pillar of the economy this year.”
While German inflation slowed to 4.5 per cent in September, down from 6.1 per cent the previous month, it is still painfully high and well above the European Central Bank’s 2 per cent target.
Income expectations also fell, due to rising prices for food and energy, the survey showed.
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And a reading of how willing consumers are to make purchases stagnated at low levels.
It is the latest sign of the economic woes facing Germany, which has been battling myriad headwinds since Russia’s invasion of Ukraine last year sparked an energy crisis and sent inflation surging.
The economy fell into recession around the turn of the year and stagnated in the second quarter, weighed down by a slowdown in the energy-hungry manufacturing sector as well as eurozone interest rate hikes.
The German government earlier this month downgraded its forecasts for this year, predicting the economy will shrink 0.4 per cent in 2023. It had previously forecast the economy would expand slightly. AFP
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