Germany: Consumer confidence expected to recover in June but remain deeply pessimistic
At the close of the second quarter, consumer confidence is forecast to recover somewhat although sentiment is expected to remain firmly entrenched in pessimistic territory. The forward-looking GfK Consumer Climate index is projected to rise from the revised all-time low of minus 23.1 in May (previously reported: minus 23.4) to minus 18.9 in June—the second lowest on record. The uptick was in part driven by the gradual reopening of the economy.
Backward-looking data for May—released at the same time as the forward-looking June estimate, and underpinning the June forecast—showed that all underlying components recorded an improvement. The outlook on the economy improved due to the federal and state governments’ response to the crisis and stimulus measures. Income expectations also became less negative, but remained entrenched in negative territory as the short-term working scheme and uptick in unemployment have contributed to a loss of income. Propensity to buy returned to optimistic territory.