Brandenburg Gate in Berlin, Germany

Germany Consumer Confidence February 2021

Germany: Consumer sentiment expected to be hard hit by extended lockdown in February

Consumer sentiment in Germany is expected to plunge to minus 15.6 in February from January’s minus 7.5, with confidence receiving a body blow from the strict lockdown.

Backward-looking data for January, which is released simultaneously and underpins the February estimate, showed that the deterioration was broad-based. Consumers’ economic expectations dropped but remained in positive territory, thanks to the stable labor market and robust manufacturing sector, which has remained unaffected by closures. That said, income expectations dropped markedly and into negative territory. This is due to an expected rise in bankruptcies on the back of the extended lockdown, fueling fears of job losses. Moreover, propensity to buy nosedived as a consequence of the lockdown.

Rolf Bürkl, consumer expert at GfK, commented:

“Consumer sentiment is facing difficult challenges in the first quarter of this year. If it is to recover sustainably, infection rates will need to decrease more than they have to date so that the measures can be relaxed significantly. This means that we will need to wait a while before we see the recovery that many had been hoping for this year.”

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