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German GfK Consumer Sentiment Hits New Record Low

germany feb14 28jun22 lt

Germany's consumer confidence dropped to a new record low in July as consumers see the risk of the economy slipping to a recession, survey results from the market research group GfK showed on Tuesday.

The consumer confidence index fell to -27.4 in July from revised -26.2 in June. The score was forecast to fall to -27.6.

The ongoing war in Ukraine and disrupted supply chains are lifting energy and food prices in particular, and make the consumer climate gloomier than ever, Rolf Bürkl, GfK consumer expert said.

Bürkl said the European Central Bank should adopt appropriate monetary policy to curb inflation. At the same time, such measures should not push the ailing Germany economy into a recession, the expert added.

All the three components of the consumer confidence index weakened in June. The economic expectations index dropped 2.4 points to -11.7 in June.

Consumers see the risk of recession. Supply chain problems and the war dampen production and high inflation is weighing on private consumption.

The income expectations index declined more sharply by 9.8 points to -33.5 in June, the lowest score in almost 20 years.

Amid falling economic and income expectations, the propensity to buy slid 2.6 points to -13.7 in June. Households have to pay more for energy and food, leaving less financial resources for larger purchases.

The survey results are based on the responses of around 2,000 consumers, carried out on behalf of the EU Commission.

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