Germany: Consumer morale drops unexpectedly in July

BERLIN (Reuters) – German consumer sentiment is expected to deteriorate slightly in July, ending a series of four consecutive months of increases, in a context of weariness linked to uncertainty over inflation and an economy that is slow to recover. straighten out, shows a survey published Wednesday.

The consumer confidence index, published by the GfK institute and the Nuremberg Institute for Market Decisions (NIM) for the month of July, stands at -21.8, compared to -21.0 in June (revised).

Analysts polled by Reuters had expected the figure to be -18.9.

The index adds to other indicators pointing to a difficult future for Europe’s largest economy, with the Ifo business climate index and the composite PMI also unexpectedly falling this month.

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For Rolf Bürkl, analyst at NIM, the interruption of the recent upward trend in consumer morale shows that putting an end to sluggish internal demand will be difficult and that disappointments cannot be ruled out.

The survey shows that incomes and economic prospects have both declined moderately. She also highlights that purchasing intentions have stagnated at a low level and that the desire to save has increased slightly, although it was already at a high level.

“The slightly higher inflation rate in Germany in May is clearly causing renewed uncertainty among consumers, which is also reflected in the increased willingness to save,” writes Rolf Bürkl. Inflation in Germany reached 2.8 percent in May, partly due to rising prices for services.

A sustainable recovery will only be possible when consumers benefit from certainty in planning their projects, which will return if the upward pressure on prices eases and the outlook is clear, explains Rolf Bürkl.

“This means that the government must communicate quickly and clearly the burdens and reliefs that citizens will face as a result of the upcoming budget discussions,” he said.

(Reporting Miranda Murray; French version Claude Chendjou, edited by Blandine Hénault)