FRANKFURT – Consumer confidence in Germany deteriorated significantly in April to plunge well below a previous record set in spring 2020 during the first pandemic lockdown, a key survey showed Wednesday.
According to the GfK consumer sentiment survey, both economic and income expectations, along with the propensity to buy, have noticeably declined. As a result, the GfK index is forecasting minus 26.5 points for consumer sentiment in May, a decrease of 10.8 points from April.
The survey was conducted on behalf of the European Commission from March 31 to April 11 to gauge sentiment for May. It’s based on interviews with around 2,000 consumers.
“The war in Ukraine and rates of high inflation have dealt a severe blow to consumer sentiment,” said GfK consumer expert Rolf Bürkl. “This means that hopes of a recovery from the easing of pandemic-related restrictions have finally been dashed.”
The massive increase in energy prices and surging inflation rates are chipping into consumers’ purchasing power and prompting a massive decline in income expectations to the lowest level in almost twenty years, survey results showed.
“There will only be a sustainable trend shift in consumer sentiment if there are successful peace negotiations on the war in Ukraine,” Bürkl said.