The corona epidemic hits Germany less hard than at times feared. This also applies to your wallet. The number of households expecting less income and postponing purchases has fallen sharply since the height of the crisis. But that only benefits part of the economy.
The vast majority of people in Germany have not yet felt the Corona crisis in their own wallets and are not afraid of it. According to the Leibniz Institute for Financial Market Research Safe at the University of Frankfurt, according to the household crisis barometer, only 8 percent of those surveyed expected that their household income would decrease in the next six months. At the height of the corona crisis in Germany at the beginning of April, it was a good double, at 17 percent.
Since April, Safe has regularly asked around 7,500 households about the effects of the crisis and expectations. The results show how concerns about loss of revenue are steadily decreasing. In the meantime, as much as 17 percent of households expect their income to increase in the next six months. At the same time, the willingness to consume increases again noticeably: At the beginning of April, 46 percent of those surveyed had stated that larger purchases due to the corona epidemic had been postponed or canceled altogether. Now only 33 percent say that. The participants were asked about purchases for more than 250 euros, excluding cars.
The reduction in value added tax decided to stimulate the economy as part of the economic stimulus package is obviously not decisive for the increasing willingness to consume. When asked whether the tax cut had an impact on their plans, only three percent of respondents replied that they were planning additional purchases. Six percent said they preferred purchases. The vast majority, on the other hand, do not want to change their plans.
Less fear of health
Not only financially, but also in terms of health, significantly fewer respondents are worried about the corona epidemic than three months ago. Only 36 percent are still afraid for their own health. At the beginning of April, 49 percent answered yes to the question. Back then, 79 percent said they avoided the public. According to the latest survey, which was carried out at the end of June, only 39 percent do so.
The results of the budget crisis barometer underscore the recent hopeful figures from German trade, which apparently is overcoming the crisis faster than feared. In May, sales in the German retail sector rose by almost 14 percent after the slump caused by the lockdown in April, and were even up on the previous year.
However, the situation of the German economy as a whole is ambiguous. While stable consumption gives hope, the export-dependent industry is still deeply in crisis. As the Federal Statistical Office announced, manufacturing companies – e.g. in mechanical engineering or the automotive industry – received a good ten percent more orders in May 2020 than in April. Despite the high increase in the previous month, order intake is still almost 30 percent lower than a year ago.
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