BERLIN (Reuters) – German consumer morale is projected to deteriorate further at the start of next year as the spread of the Omicron coronavirus variant is clouding the outlook for Europe’s largest economy, a survey showed on Tuesday.
The GfK institute said its consumer sentiment index, based on a survey of around 2,000 Germans, fell to -6.8 points heading into January, from a revised -1.8 points a month earlier.
The January reading was the lowest since June and compared with a Reuters forecast for a smaller drop to -2.5.
GfK economist Rolf Buerkl said the high infection rates of the fourth coronavirus wave already causes renewed restrictions for many retailers and service providers.
Germany banned unvaccinated people from entering non-essential establishments at the beginning of the month in an attempt to control rising cases amid the spread of the Omicron variant.
The so-called 2G rule – which restricts access to vaccinated or recovered people – has hit the Christmas business badly, Buerkl added.
“The outlook for the beginning of the next year is also subdued against the background of the rapid spread of the Omicron variant,” Buerkl said.
He added that the unusually high inflation rate in Germany was dampening the consumer morale additionally.
Chancellor Olaf Scholz and state premiers are expected to discuss and announce more restrictions at a meeting later on Tuesday.
JAN 2022 DEC 2021 JAN 2021
Consumer climate -6.8 -1.8 -7.5
Consumer climate components DEC 2021 NOV 2021 DEC 2020
– willingness to buy 0.8 9.7 36.6
– income expectations 6.9 12.9 3.6
– business cycle expectations 17.1 31.0 4.4
NOTE – The survey period was from Dec. 2-13, 2021.
The consumer climate indicator forecasts the development of real private consumption in the following month.
An indicator reading above zero signals year-on-year growth in private consumption. A value below zero indicates a drop compared with the same period a year ago.
According to GfK, a one-point change in the indicator corresponds to a year-on-year change of 0.1% in private consumption.
The “willingness to buy” indicator represents the balance between positive and negative responses to the question: “Do you think now is a good time to buy major items?”
The income expectations sub-index reflects expectations about the development of household finances in the coming 12 months.
The additional business cycle expectations index reflects the assessment of those questioned of the general economic situation in the next 12 months.
(Reporting by Michael Nienaber,)
