Angela Merkel, German Chancellor

Consumer confidence inches after COVID-19 shock in Germany ─Survey

* There’s uncertainty, German economy not out of the woods, says Pollsters GfK

Web Editor | ConsumerConnect

As the populace recover from the latest shocking wave of Coronavirus infections in the country, German consumer confidence has regained some of the lost ground.

But it remains deep in negative territory as Europe’s top economy faces a slow recovery, a survey has shown.

Consumer confidence is described as an “economic indicator that measures the degree of optimism that consumers feel about the overall state of the economy and their personal financial situation.”

It is particularly important in the retail and luxury goods industries since their revenues are highly interrelated with spending patterns.

Pollsters GfK Tuesday, May 26 said their forward-looking monthly barometer for June 2020 showed a reading of minus 18.9 points, up from the May reading of minus 23.1 when the indicator plunged 25 points overall, according to agency report.

Table: Latest data released by GfK  Tuesday, May 26, 2020  Source: Forexlive

According GfK, it was learnt that despite the improvement, the June level is the second-lowest ever measured by the survey since its creation in 1980.

GfK expert Rolf Buerkl stated: “Step-by-step reopening of many businesses has definitely helped prevent any further erosion.

“But uncertainty remains high among consumers. They believe the German economy is far from out of the woods and expect to be hit by a serious recession.”

Consumer confidence in several economies is negatively affected by the outbreak of Coronavirus pandemic.

Looking to the sub-indexes that make up the consumer confidence measure, people’s expectations for the economic outlook and for their own income both improved — but also remained in negative territory.

Meanwhile, respondents’ openness to making purchases clambered back into low positive figures.

Buerkl said: “People’s fear of losing their job remains high, and alongside slashed incomes, that’s turning out to be a significant brake on consumption,”

GfK polled around 2,000 people between May 6 and 18, 2020, to compile for this month’s survey.

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