Germany: Consumer confidence falls amid higher energy prices
April 27, 2012
Consumer confidence deteriorated slightly among German consumers amid surging energy prices. The forward-looking GfK consumer confidence indicator for May fell to 5.6 points from a revised 5.8 points in April (previously reported: 5.9 points). The reading contrasted market expectations that had the index remaining unchanged at the original 5.9 points observed in April and represented the second consecutive drop in consumer sentiment. While the overall consumer confidence indicator refers to May, the GfK Institute also published detailed data referring to April. According to the Institute, economic expectations improved in April, as a majority of consumers perceive that that the German economy is showing resilience compared to their regional peers. However, income expectations deteriorated as respondents were more concerned about high petrol and diesel prices. In addition, consumers' propensity to buy fell sharply over the previous month, as higher prices and an increase in inflation expectations are likely to dent their purchasing power going forward.
Author: Ricardo Aceves, Senior Economist