Germany: Consumer sentiment expected to rise but remain pessimistic in June
May 27, 2021
The GfK consumer climate index is expected to rise to minus 7.0 in June from May’s minus 8.6. The anticipated improvement in sentiment levels comes on the back of lower numbers of new Covid-19 cases and greater inoculation, facilitating the easing of restrictions and fueling confidence.
The headline reading was underpinned by backward-looking data for May, which is released at the same time and showed a strong jump in economic expectations and a rise in income expectations. Optimism regarding the German economy rose to its highest level in over three years. Attitudes on the economy have improved markedly as lockdown measures have been relaxed. The sharp rise in the economic outlook drove a notable uptick in income expectations. As the economy reopens, less people will be out of the short-time work scheme, raising income hopes. Less positively, propensity to buy suffered a setback in May. Although restrictive measures have been eased, certain services are not yet available or to a limited extent.
Author: Jan Lammersen, Economist