The propensity to save has increased significantly in Germany, causing consumer confidence to fall again. Consumer Confidence Index decreased by 0.9 points to minus 26.5 points for October.
Release:
GfK, a market research company headquartered in Germany, announced the Consumer Confidence Index results for next month.
The Consumer Confidence Index, measured as minus 25.6 points for this month in Germany, decreased by 0.9 points to minus 26.5 points for October.
In the statement, it was stated that the Consumer Confidence Index, which was measured as minus 25.6 points for this month in August, decreased by 0.9 points to minus 26.5 for October. The expectation was that the index would fall to minus 26.
In his essment of the issue, GfK Researcher Rolf Buerkl said, “Although the economic expectations of consumers have increased slightly and both income expectations and purchasing tendency have shown little growth, the tendency to save has increased significantly, causing consumer confidence to fall again.” he said.
EMPHASIS ON ‘PERSISTENTLY HIGH INFLATION’
Buerkl emphasized that “stubbornly” high inflation caused by rising food and energy prices has dragged down consumer confidence and that the chances of recovery this year have “probably fallen to zero.”
According to GfK, the saving trend reached its highest level since April 2011, while Bürkl explained the reason for this as “consistently high inflation due to sharply rising food and energy prices”.
GfK market researchers also see the situation in the labor market as a reason for consumers’ uncertainty about spending. Rising concerns about job losses are also negatively impacting consumer confidence.
“The increasing number of company bankruptcies increases the anxiety of many employees about losing their jobs,” GfK said in its statement. The statement was included.
COMPANIES ARE LESS WILLING TO HIRING
In the statement made by the Economic Research Institute (Ifo), it was reported that the desire of German companies to hire new personnel worsened in September.
Ifo Employment Barometer, which was 97 points in August, dropped to 95.8 points in September, the lowest level since February 2021.
Klaus Wohlrabe, Director of the Ifo Center for Surveys, commented: “The strong employment expansion seen over the last few months has come to a halt.”
The German economy has failed to grow for three consecutive quarters due to rising interest rates, a weak global economy and high inflation. While the economy shrank by 0.4 percent in the last quarter of last year and 0.1 percent in the first quarter of the year, it failed to grow in the second quarter of the year.
For this year, Ifo expects a 0.4 percent contraction in the German economy, and the Kiel Institute for the World Economy (IfW) expects a 0.5 percent contraction.
According to International Monetary Fund (IMF) forecasts, Germany will be the only G7 country expected to shrink this year. (AA)
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