Germany’s consumer confidence is set to weaken in May as rising cases of infections and the subsequent tightening of restrictions dampened income expectations as well as the economic outlook, survey results from the market research group GfK showed on Wednesday.
The forward-looking consumer sentiment index fell to -8.8 in May from revised -6.1 in April. The score was forecast to improve to -3.5.
“The third wave will ensure that the recovery of the domestic economy is still a long way off,” Rolf B?rkl, GfK consumer expert said. As in 2020, consumption will not be a pillar of the economy this year.
While the propensity to buy increased moderately, economic and income expectations logged significant losses in April.
The income expectations indicator dropped 13 points to 9.3 points in April. The tightening of the lockdown is likely to have reignited unemployment fears and also raised concerns about companies moving into bankruptcy.
In contrast to the income prospects, the propensity to buy has so far been resisting the third wave. The corresponding index advanced to 17.3 points from 12.3 a month ago. This was the third consecutive increase.
The economic expectations index fell to 7.3 points from 17.7 in the previous month. Despite rising exports, weak consumer spending is weighing on economic growth this year.
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