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Germany Consumer Confidence November 2021

Germany: Consumer confidence expected to improve in November

The GfK consumer climate index is forecast to rise to 0.9 in November from 0.4 in October. This would mark the highest reading since April last year, shortly before the impact of the Covid-19 crisis started to be felt.

However, backward-looking data for October, which is released at the same time and underpins November’s expectations, painted a mixed picture. Although economic expectations eased from the prior month, they remained elevated and highlighted that consumers remained upbeat about the recovery of the German economy. That said, it masks the impact of supply-side bottlenecks on the productive capacity of the economy; the automotive sector is particularly feeling the pinch from material shortages. Furthermore, income expectations cooled notably amid rising inflationary pressures. Greater price pressures are weighing on consumers’ purchasing power, while reduced production levels could impact earnings from short-time work. On the other hand, consumers’ propensity to buy rose strongly in October driven by inflation concerns.

Inflation has become a worry not only policy-makers face, but also consumers. Rolf Bürjkl, GfK consumer expert, added:

“German citizens are clearly expecting further price increases. That is why they consider to make purchases, in order to avoid even higher prices.”

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