German consumer sentiment plunges to new record low - GfK

Reuters

Published Jun 28, 2022 02:06AM ET

BERLIN (Reuters) - German consumer sentiment is projected to fall to another record low in July, as the Ukraine war and interrupted supply chains push up energy and food prices even further, a survey showed on Tuesday.

The GfK institute said its consumer sentiment index, based on a survey of around 2,000 Germans, dropped to -27.4 points heading into July after posting a short-lived recovery in June with a revised reading of -26.2 points.

"The ongoing war in Ukraine and disruptions in supply chains are causing energy and food prices in particular to skyrocket, resulting in a gloomier consumer climate than ever before," said Rolf Buerkl, GfK consumer expert.

The latest plunge in consumer morale, based on a June 2-13 survey, was however not as severe as an analysts' forecast of -27.7, according to a Reuters poll.

In May, German inflation rose to 8.7% - its highest level in nearly half a century - as the fallout of Russia's invasion of Ukraine built on existing bottlenecks caused by the pandemic.

JUL 2022 JUN 2022 JUL 2021

Consumer climate -27.4 -26.2 -0.3

Consumer climate components JUN 2022 MAY 2022 JUN 2021

- willingness to buy -13.4 -11.8 13.3

- income expectations -30.2 -27.4 30.8

- business cycle expectations -11.6 -11.5 52.2

NOTE - The survey period was from June 2 to 13, 2022.

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 earlier.

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?"