Economy: Decline in private consumer spending in Corona year 2020

Economy
Decline in private consumer spending in Corona year 2020

The corona crisis with temporary restrictions on public life dampened private consumption in Germany last year.

The monthly consumption expenditure of private households fell by 3 percent in 2020 to an average of EUR 2507 compared to the previous year, as the Federal Statistical Office announced on Monday. However, people spent more on certain products and services than in the previous year, such as computers, bicycles, food and housing.

Lockdowns and limits on the number of people, for example in leisure and service facilities, led to a decrease in spending. Economic stimulus measures such as the temporary VAT cut and the child bonus would have had a positive effect.

Decline also due to closings

The greatest decrease was spent on visits to pubs and restaurants as well as overnight stays in hotels, guest houses and other quarters. Households spent an average of 102 euros a month on this, 35 percent less than in 2019 (157 euros). Tourist overnight stays and visits to the gastronomy were forbidden at times.

On the other hand, more than a year earlier, people were spending on furnishing their homes. Mainly large and small household appliances, home textiles and furnishings were purchased. The statisticians recorded the greatest increase in expenditure in this area with around 13 percent to an average of 160 euros per month.

Private consumption is an important pillar of the German economy. Economists fear that the increased number of infections could dampen consumption again because consumers, for example, refrain from going to restaurants for fear of infection. In addition, there are stricter rules to combat the pandemic again in the first federal states.

dpa