Germany: Consumer confidence expected to turn pessimistic in December
November 25, 2021
The GfK consumer climate index is forecast to drop to minus 1.6 in December from plus 1.0 in November. This would mark the worst reading since June; the fourth wave of Covid-19 and greater price pressures weigh on sentiment.
Backward-looking data for November, which is released at the same time and underpins December’s expectations, confirmed deteriorating sentiment. Economic expectations fell sharply to a seven-month low, as supply bottlenecks have thrown a spanner in the works of the economic recovery. Industrial production has come to a near standstill amid material shortages. Similarly, income expectations dropped to a seven-month low. The supply-side issues weighing on the industrial sector have increased consumers’ fear of short-term work. In addition, building price pressures are eating into consumers’ pockets. Consequently, propensity to buy dropped to a nine-month low.
Author: Jan Lammersen, Economist