Germany’s consumer confidence is expected to plummet in February as shoppers choose to save rather than spend in the face of a chilly economic climate.
Bleak Outlook for Consumer Confidence
A forward-looking consumer-sentiment index, published by research group GfK and the Nuremberg Institute for Market Decisions, indicates a sharp drop in confidence to minus 29.7 in February, compared to minus 25.4 this month. This forecast falls well below economists’ expectations of a slight improvement to minus 24.5.
Reluctance to Spend and Gloomy Outlooks
According to the survey, consumers are reluctant to spend due to bleaker outlooks for personal incomes and the general economy. Additionally, German shoppers are now prioritizing saving their salaries.
“The improvement in consumer sentiment last month was apparently just a brief flare-up before Christmas,” stated Rolf Buerkl, consumer expert at NIM. He further expressed that the consumer climate has suffered a significant setback at the beginning of this year.
Key Concern: Inflation
The survey revealed that inflation remains a major concern for German shoppers, overshadowing other issues such as political and economic uncertainty.
Little Hope for Economic Boost
The report suggests that there is little hope for an early boost to the struggling German economy as the outlook for business worsens, according to purchasing managers’ data. Private sector sentiment is also bleak, with companies increasingly anxious about their prospects in the coming months.
“These results indicate that hopes for a sustained recovery in consumer sentiment have to be postponed further into the future,” stated the GfK/NIM report. It emphasizes that crises, wars, and persistently high inflation contribute to consumer insecurity, hindering any improvements in sentiment.