Germany: Consumer sentiment expected to drop to all-time low in August
July 28, 2022
The GfK consumer climate index is forecast to drop from minus 27.7 in July to an all-time low of minus 30.6 in August.
The expected deterioration in sentiment came on the back of backward-looking data for July, which is released simultaneously and underpins the August expectation. Economic and income expectations suffered another blow in July due to worries over an impending recession in Germany; a gas squeeze and potential gas shortages weigh heavily on the minds of consumers in conjunction with the war in Ukraine and lingering supply chain issues. Firms could face production restrictions due to gas shortages, which is giving rise to fears over job safety. This impacted income expectations on top of the high inflation rates eating into consumers’ pockets. Consequently, propensity to buy suffered a setback as well.
Author: Jan Lammersen, Economist