2023-12-20 13:33:13
After a long dry spell, consumer sentiment in Germany has improved somewhat. Is this the start of a better future or just a flash in the pan?
Nuremberg.
Germans’ purchasing mood improved significantly at the end of the year – but experts are pouring water on the wine again in the coming months. According to the economic research institute Ifo, the decline in inflation is likely to stall. The Munich researchers said the proportion of companies in Germany that wanted to raise their prices in the coming months was increasing again.
According to a consumer study by the market research company GfK and the Nuremberg Institute NIM, both expectations regarding income and the inclination to make larger purchases improved noticeably at the turn of the year. In their forecast for January, the two institutes see the consumer climate at -25.1 points. This means an increase of 2.5 points compared to the previous month. However, the consumer climate before the pandemic was around +10 points.
The experts expressed concerns about further developments. “It remains to be seen whether the current increase is the beginning of a sustainable recovery in consumer sentiment,” said NIM expert Rolf Bürkl. “Consumers are still very worried.” Geopolitical crises and wars, sharply rising food prices and discussions about the federal budget caused uncertainty. “Consequently, the level of consumer sentiment is currently still extremely low.”
Less money for consumption
The concerns are supported by a survey by the consulting firm AlixPartners. According to this, around 35 percent of Germans want to spend less money on consumption in the coming year. This affects spending on everyday products such as food, but also areas such as electronics, leisure items or hardware store products as well as entertainment and gastronomy.
The consultants surveyed 10,000 consumers in seven countries in October and November, including 2,000 in Germany. The most important support for the slight improvement at the end of the year is the income expectation. People could hope for higher wages and salaries.
At the same time, prices are also rising. Ifo price expectations rose to 19.7 points in December from 18.1 points in November. The experts expect more price increases in consumer-related service areas. “The restaurateurs in particular want to noticeably increase prices,” said the institute. The return to the normal VAT rate for food on January 1st is likely to play a role here. But retailers are also increasingly planning price increases.
Lower energy prices pushed the inflation rate in November to its lowest level since June 2021. Consumer prices were 3.2 percent higher than in the same month last year. According to many economists, the inflation rate is likely to rise to around 4 percent in December. Last year, the state covered the one-time cost of the December deduction for gas and district heating customers. This effect no longer applies this year. (dpa)
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