German consumer morale drops heading into September- GfK

Reuters

Published Aug 26, 2021 02:03AM ET

Updated Aug 26, 2021 09:55AM ET

BERLIN (Reuters) - The mood among German consumers darkened heading into September as accelerating inflation and rising COVID-19 cases made them more hesitant to buy, a survey showed on Thursday.

The GfK institute said its consumer sentiment index, based on a survey of around 2,000 Germans, dropped to -1.2 points for September, from a revised -0.4 points a month earlier. The reading compared with a Reuters forecast for -0.7.

"Prices have been rising rapidly since the middle of this year. This has a dampening effect on the consumer mood," GfK consumer expert Rolf Buerkl said in a statement.

Germany's harmonised annual consumer prices rose 3.1% in July, hitting a 13-year high and fuelling a debate about whether the increase in the cost of living will persist.

An increase in coronavirus infections and a slower pace of vaccinations have also hit consumers' expectations for the economy and affected their propensity to buy, Buerkl added.

Germany reported 11,561 new coronavirus infections on Wednesday and a seven-day incidence rate of 61.3 per 100,000 people, according to the Robert Koch Institute for infectious diseases.

Some 59.4% of the population are fully vaccinated with around 64.4% having received at least one dose.

The consumer climate indicator forecasts the development of real private consumption in the following month.

An indicator reading above zero signals year-on-year growth in private consumption. A value below zero indicates a drop compared with the same period a year ago.

According to GfK, a one-point change in the indicator corresponds to a year-on-year change of 0.1% in private consumption.

The "willingness to buy" indicator represents the balance between positive and negative responses to the question: "Do you think now is a good time to buy major items?"