BERLIN (Reuters) – A survey done on Tuesday showed that German consumer sentiment is expected to hit another record low in July. This is because the war in Ukraine and broken supply chains are making energy and food prices go up even more.
The GfK institute’s consumer sentiment index, which is based on a survey of about 2,000 Germans, fell to -27.4 points at the start of July. This was after a short-lived improvement in June, when the reading was changed to -26.2 points.
Rolf Buerkl, a GfK consumer expert, said that the ongoing war in Ukraine and problems in supply chains are making energy and food prices go through the roof. This is making consumers feel worse than ever before.
Reuters polled analysts, and they said that the latest drop in consumer morale, which was based on a survey from June 2-13, was not as bad as the –27.7 that analysts had predicted.
In May, Germany’s inflation rate reached 8.7%, which was the highest level in almost 50 years. This was because the effects of Russia’s invasion of Ukraine added to the problems caused by the pandemic.
JULY 2022, JUNE 2022 2021
Consumer climate -27.4-26.2-0.3
Consumer climate componentsMAY 2022, JUN 2021
– willingness to buy -13.4 -11.8 13.3
– Expectations about money -30.2-30.2-30.8
– Expectations for the business cycle: –11.6 -11.5 52.2
The survey was conducted from June 2 to June 13, 2022.
The consumer climate indicator predicts how real private spending will change over the next month.
When an indicator is above zero, it means that private consumption has grown from one year to the next. When compared to the same time last year, a value below zero shows a drop.
GfK says that a change of one point in the indicator equals a change of 0.1 percent in private consumption from one year to the next.
The “willingness to buy” indicator shows how many people answered “yes” and “no” to the question, “Is now a good time to buy big things?”
The income expectations sub-index shows how people think their household finances will change in the next 12 months.
The additional business cycle expectations index shows how people think the economy will be doing over the next 12 months.
