As of: 08/26/2021 11:42 a.m.
Fear of the consequences of the next corona wave, declining economic expectations and rising inflation are fueling uncertainty among consumers. The GfK consumer confidence is falling.
Rising prices and corona infection numbers depress the mood of German consumers. The GfK consumer confidence index fell from minus 0.4 points in August to minus 1.2 points in September. Experts had forecast a significantly weaker decline.
For the current survey, around 2000 people were interviewed from the beginning to mid-August. Consumption is an important pillar of economic development in Germany.
Clouded shopping experience
The economic euphoria has diminished, it said: “Significantly increasing incidences, a decline in vaccination dynamics and discussions about how to deal with unvaccinated people in the future have noticeably unsettled consumers,” comments GfK consumer expert Rolf Bürkl. Consumers feared that restrictions could even be tightened again.
According to Bürkl, the mask requirement and distance rules cloud the shopping experience anyway. A study recently showed that the trend among consumers is to shop in stock. In addition, according to the GfK expert, the more rapidly rising prices are also likely to depress the propensity to consume.
High inflation is a concern
Experience has shown that rapidly rising prices “have a dampening effect on consumer confidence,” said Bürkl. In view of the low interest rates, “private households perceive the inflation rates as even more threatening to their purchasing power”, even if a large part, according to the GfK expert, is a one-off effect after the temporary reduction in VAT in 2020.
In Germany, the inflation rate of 3.8 percent is currently higher than it has been since 1993, as energy and food in particular have recently become more expensive.
Consumers were also no longer so optimistic about the economy. In August, the corresponding GfK barometer fell for the second time in a row and, at 40.8 points, lost 13.8 points compared to the previous month. Nevertheless, the economic expectations are at a high level. Consumers are still counting on the upturn, even if they believe the momentum is likely to weaken somewhat.