Brandenburg Gate in Berlin, Germany

Germany Consumer Confidence July 2022

Germany: Consumer sentiment expected to deteriorate further in July

The GfK consumer climate index is forecast to drop from minus 26.2 in June to an all-time low of minus 27.4 in July.

The expected improvement in sentiment came on backward-looking data for June, which is released simultaneously and underpins the June expectation. Economic expectations worsened notably in June as consumers consider the risk of a recession to be significant; supply-chain woes and the war in Ukraine hinder Germany’s industrial capacity, while household spending is set to be affected by elevated inflation. Income expectations deteriorated in unison, falling to a two-decade low. High inflation is eating into consumers’ pockets and “casting a shadow over consumer sentiment”. Consumers are unlikely to use excess savings to purchase items. Moreover, propensity to buy also suffered a setback at the hands of inflation.

Analysts at the EIU commented:

“The Russian invasion will drag further on growth in 2022. Germany is among the countries most exposed to Russian energy imports […] and the EU’s decision to phase out two-thirds of Russian gas this year will therefore lead to a significant spike in German energy costs, particularly in the industrial sector. Other spiking commodity prices will also weigh on purchasing power, and hence on private consumption. In addition, even as supply chains in Europe stabilise, pandemic-related lockdowns in China will drag on German industrial production further, while uncertainty about the domestic economic impact of EU sanctions on Russia will damage business confidence.”

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest