German consumer confidence hit an all-time low for May as the war in Ukraine drives up costs for households and dampens hopes for a post-pandemic recovery, a survey showed on Wednesday.
The GfK Institute said its consumer sentiment index, based on a survey of about 2,000 Germans, had dropped to -26.5 points for May from -15.7 points in a revised month earlier, as the indicator deteriorated. even more compared to the previous record set in May 2020, during the first lockdown in Germany against Covid-19.
Analysts polled by Reuters had expected the index to drop to -16.0.
“The war in Ukraine and high inflation rates have dealt a heavy blow to consumer sentiment. This means that hopes for a recovery with the easing of restrictions related to the pandemic have finally been dashed,” said GfK consumer expert Rolf Buerkl.
The war, which began with Russia’s invasion of Ukraine on Feb. 24, led to an explosion in energy prices and sanctions against Moscow, both of which diminished consumers’ purchasing power, the GfK said.
The drop in consumer sentiment was accelerated by a significant increase in the propensity to save in April, he added.
“There will only be a sustainable trend change in consumer sentiment if there are successful peace talks on the war in Ukraine,” Buerkl said.
The survey was conducted from March 31 to April 11.
Source: CNN Brasil
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