German consumer sentiment set to deteriorate in January
By Michele Maatouk
Date: Tuesday 22 Dec 2020
(Sharecast News) - German consumer sentiment is set to deteriorate in January as Covid-19 lockdowns take their toll, according to a survey released on Thursday by market research group GfK.
GfK's forward-looking consumer sentiment index is expected to fall to -7.3 in January from a revised -6.8 in December. Analysts were expecting a reading of -7.6.
The economic expectations index rose to 4.4 in December from -0.2 in November, while the income expectations gauge fell to 3.6 from 4.6. The propensity to buy index came in at 36.6 in December, up from 30.5 in November, while the consumer climate gauge deteriorated to -6.8 from -3.2.
GfK highlighted the sharp rise in infections in the second wave of the virus and the fact the healthcare system is at risk of being overwhelmed. It said stricter lockdown measures implemented in December, after the light lockdown a month earlier were "unavoidable" and will lead to further uncertainty.
"This uncertainty also explains the uneven development in consumer confidence as well as the increase in propensity to save this month," it said.
Rolf Bürkl, consumer expert at GfK, said: "At present, the savings indicator is the main factor driving the third decline in a row in the consumer climate. With the hard lockdown and the closure of most stores, the consumer climate is faced with yet another setback.
"There is reason to fear that the consumer climate is about to enter a very difficult phase in the coming weeks. Any relaxation or recovery can certainly only come when the infection rates have dropped so far that the strict restrictions can be loosened once more."
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