Austria: Consumer sentiment stabilizes at record-low in June
Consumer confidence came in at minus 24.0 in June, matching May’s result. June’s print marked the worst reading on record. As a result, the index pointed to deteriorating confidence among consumers.
The stable headline print reflected worsening sentiment regarding households’ financial situation in the past year and the next 12 month, while consumers also viewed the general economic climate of Austria in the past 12 months less favorably. On the other hand, views regarding the general economic situation in the next 12 months were less downbeat. Furthermore, the current financial situation of households was viewed more favorably.
The war in Ukraine and its fallout have dealt a heavy blow to consumer sentiment; household consumption is likely to have been constrained in the second quarter by rising energy and food prices. Moreover, consumers are more inclined to save at present and in the next 12 months, while also less inclined to make major purchases in the year ahead. Softer household consumption growth in the second quarter will weigh on overall economic activity. That said, the government enacted a third fiscal relief package to combat rising price pressures of EUR 28 billion. The measures will be effective 1 January 2023 and spread out over the next four years, which include direct subsidies and indexation of income tax to inflation.