German Consumer Confidence Is Expected to Fall in December
By Maria Martinez
Consumer sentiment in Germany is expected to deteriorate
noticeably in December, due to rising inflation and a surge in
coronavirus cases, according to data released by market-research
group GfK on Thursday.
GfK's forward-looking consumer sentiment index forecasts
confidence among households falling to minus 1.6 points in December
from a revised figure of 1.0 point in November. Economists polled
by The Wall Street Journal anticipated a drop, expecting sentiment
to decline to minus 1.0 points.
Consumer sentiment is currently being squeezed from two sides,
Rolf Buerkl, consumer expert at GfK said. The number of cases in
the fourth wave of the coronavirus pandemic is soaring, which
threatens to overwhelm the health system and could lead to further
restrictions, while the purchasing power of consumers is dwindling
due to a high inflation rate, he added.
GfK uses data from three subindexes from the current month to
derive a sentiment figure for the coming month, measuring
consumers' economic expectations, income expectations and
propensity to buy. In November, the three indicators decreased.
Economic expectations fell to 31 points in November from 46.6 in
October. The recovery of the German economy is starting to falter,
primarily due to interruptions in supply chains, GfK said.
The income expectation indicator fell again in November, to
12.9, from 23.3 in the previous month.
"On the one hand, the indicator is influenced by high inflation
and an associated reduction in the purchasing power of income,
while on the other hand, it is influenced by production
restrictions caused by interruptions in supply chains," the
market-research group said.
Propensity to buy fell to a nine-month low of 9.7 from 19.4 in
Write to Maria Martinez at firstname.lastname@example.org
(END) Dow Jones Newswires
November 25, 2021 02:14 ET (07:14 GMT)
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