By Marco Babic
ZURICH (MaceNews) – After improving for three consecutive months, consumer confidence in Germany fell on fears coronavirus restrictions will be further tightened, which served to dampen income expectations.
Based on August results, Germany’s GfK institute is forecasting a reading of -1.8 in September for consumer confidence, down from a revised -0.2 in August, as a cautious mood among consumers is leading to an increased propensity to save.
The desire to buy increased slightly, rising to 43.7 in August from 42.5 in July, the possible result of the reduction in the value added tax on July 1. This was, however, more than offset by a decline in income expectations to 12.8 from 18.6 in July.
“An increase in the number of infections and the fear that coronavirus-related restrictions will be further tightened are creating uncertainty and consequently dampening” consumer confidence, according to GfK consumer expert Rolf Buerkl.
“Whether or not this is just a temporary slowdown will depend primarily on what infection rates look like in future and the necessary measures to be put in place by policy makers,” Buerkl said in a statement.
Economic expectations increased slightly to 11.7 from 10.6 in July, rising for the fourth consecutive month and confirming the gains in the ZEW and Ifo economic assessments.
“Consumers remain confident that with the help of extensive stimulus packages for businesses and consumers, the German economy will be able to recover” from the worst post-war recession, GfK said.