Consumer sentiment in Germany fell to a new all-time low in June. Above all, high inflation is putting pressure on the consumer climate.
Consumer sentiment in Germany has fallen to a new record low. Above all, the increase in the cost of living, which is currently almost eight percent, is “depressing consumer sentiment and sending it plummeting,” said the market research company GfK in Nuremberg on Tuesday. The forecast GfK index for July slipped to minus 27.4 points.
“Since the start of the survey for all of Germany in 1991, no lower value than the current one has been measured,” said GfK consumer expert Rolf Bürkl. The ongoing war in Ukraine and disrupted supply chains caused energy and food prices in particular to explode and made the consumer climate more gloomy than ever.
Inflation causes purchasing power to “melt away”
According to a GfK survey, the economic prospects are bleak: Consumers continue to see a great risk that the German economy could slip into recession. “Supply chain problems and the Ukraine war are currently hindering production in Germany,” explained Bürkl. In addition, due to high inflation, private consumption, which is an important pillar of economic growth, is threatening to fail.
Income expectations are correspondingly negative: in June, the corresponding GfK indicator fell to its lowest value for almost 20 years. Inflation lets the purchasing power “melt away”. The funds saved in the past two years during the corona pandemic would probably not be converted into purchases and acquisitions to the extent hoped for, said Bürkl.
High energy costs depress consumer sentiment
The GfK propensity to buy index fell to its lowest level since October 2008 during the financial and economic crisis. “If private households have to pay significantly more for energy and food, there are correspondingly fewer financial resources, especially for larger purchases,” says Bürkl.
For its representative studies on the consumer climate, GfK conducts monthly interviews with consumers about their economic expectations, their income expectations and their propensity to buy. For the current survey, around 2000 people were interviewed from May 2nd to 13th. Consumption is considered an important pillar of economic development in Germany.
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
