Status: 06/28/2022 09:39 a.m
Consumer sentiment has hit a new record low. The GfK index fell to its lowest level so far. This is mainly due to the drastic increase in the cost of living.
The consumer mood of the Germans surveyed by the market researchers of GfK is gloomier than ever. The forecast consumer climate index for July slipped to minus 27.4 points. “Since the start of the survey for all of Germany in 1991, no lower value than the current one has been measured,” said GfK consumer expert Rolf Bürkl.
Above all, the increase in the cost of living, which is currently almost eight percent, is “depressing consumer sentiment and sending it plummeting,” explained the Nuremberg market research company. The main causes of the increase in energy and food prices, the Ukraine war and disrupted supply chains, will remain a heavy burden for the foreseeable future. “Where else should consumers be in a good mood? Every time they go to the supermarket, the bill is higher than when they bought it before,” commented DekaBank economist Andreas Scheuerle.
Consumers fear inflation
According to a GfK survey, the economic prospects are bleak: Consumers continue to see a great risk that the German economy could slide into recession. According to Bürkl, private consumption, an important pillar of economic growth, is in danger of being lost due to the high level of inflation.
Income expectations are correspondingly negative: In June, the corresponding GfK indicator fell to its lowest value for almost 20 years. Inflation is letting purchasing power “melt away”. It is true that consumers have been able to make considerable savings in the past two years of the corona pandemic. However, these funds would probably not be converted into purchases and acquisitions to the extent hoped for, said Bürkl. The GfK propensity to buy index fell to its lowest level since October 2008 during the financial and economic crisis. “If private households have to pay significantly more for energy and food, there are correspondingly fewer financial resources, especially for larger purchases,” says the GfK expert.
For its representative studies on the consumer climate, GfK surveys consumers every month about their economic expectations, their income expectations and their propensity to buy. For the current survey, around 2000 people were interviewed from May 2nd to 13th.