Economic situation: Ifo: Sentiment in retail is increasingly gloomy

Economic situation: Ifo: Sentiment in retail is increasingly gloomy

The poor economic situation is having an impact on private consumer spending. According to the Ifo Institute, the cause is consumer uncertainty.

According to the Ifo Institute, the mood in German retail has continued to deteriorate. According to the September survey by Munich economists, car and furniture dealers in particular see their business situation as unfavorable. The business climate index for retail as a whole fell from minus 23.1 points in August to minus 25.6, as the Ifo Institute announced.

“Consumers are uncertain about the economic policy environment,” said economist Patrick Höppner. “This means that no dynamic development in private consumer spending can be expected for the rest of 2024.”

Accordingly, the monthly survey suggests that retail prices will not rise too much in the coming months. “In a predominantly difficult business environment, retailers see fewer and fewer opportunities for price increases,” said Höppner. “Employment is also more likely to fall than rise in the short term.”

Retail Association: Consumer sentiment continues downward trend

The retail association HDE also points out that the downward trend in consumer sentiment that has been ongoing for months continued in October. The current consumption barometer has declined for the fourth month in a row. Private consumption is unlikely to provide any growth stimulus in the final months of the year.

Since consumers’ propensity to buy is increasing compared to the previous month, the German Trade Association (HDE) is of the opinion that a minimal increase in consumption can be expected in the coming weeks and months. At the same time, however, consumers planned to intensify their savings efforts.

The weak overall economic outlook and significantly less optimistic economic forecasts are also reflected in the outlook for consumers, according to the HDE. They shared the pessimism of economic experts and the economy and were more pessimistic than a year ago. Consumers were also not very optimistic about the development of their own income. According to HDE, expectations are also falling here.

Source: Stern

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