Consumer morale down in Germany
Saturday, October 27, 2007
WIDESPREAD German price increases, including those of butter and electricity, are starting to weigh heavily on consumer confidence in the eurozone's biggest economy, a monthly survey showed yesterday.
The GfK institute's index fell to 4.9 points from 6.7 at the end of September, when it had already dropped for the second month in a row.
The findings "not only recorded a downturn in both economic and income expectations, but also in the propensity to buy," a statement said.
"Restraint is evident everywhere."
The latest drop was much sharper than expected, with an analyst survey by Thomson Financial forecasting a decrease to 6.4 points.
Consumer morale has suffered in the past few months from fears of inflation, a reaction to sometimes drastic increases in food products on top of high energy prices, GfK noted.
"The fear of inflation which arose suddenly in summer is one of the main factors responsible for the subdued consumer sentiment," it said.
Commenting on the results, IXIS-CIB analyst Sylvain Broyer said: "It seems difficult to believe that consumption will pick up significantly next year in Germany, as it is consensually expected."
German inflation is rising sharply and could hit 3.0 per cent by the end of the year, according to the central bank.
AFP
The GfK institute's index fell to 4.9 points from 6.7 at the end of September, when it had already dropped for the second month in a row.
The findings "not only recorded a downturn in both economic and income expectations, but also in the propensity to buy," a statement said.
"Restraint is evident everywhere."
The latest drop was much sharper than expected, with an analyst survey by Thomson Financial forecasting a decrease to 6.4 points.
Consumer morale has suffered in the past few months from fears of inflation, a reaction to sometimes drastic increases in food products on top of high energy prices, GfK noted.
"The fear of inflation which arose suddenly in summer is one of the main factors responsible for the subdued consumer sentiment," it said.
Commenting on the results, IXIS-CIB analyst Sylvain Broyer said: "It seems difficult to believe that consumption will pick up significantly next year in Germany, as it is consensually expected."
German inflation is rising sharply and could hit 3.0 per cent by the end of the year, according to the central bank.
AFP
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