Savings soar in Germany while consumer confidence marks minimum

Published
08/26/2022 12:11

Updated
08/26/2022 12:11

The fear of a sharp increase in energy costs in the coming months has caused a further deterioration of the German consumer confidence indicatorproduced by GfKwhich falls to a new historic low of -36.5 points for September from -30.9 in August.

Likewise, in anticipation of the higher cost of energy supply bills in the winter, German consumers have substantially increased their savingswhich marks maximums since 2011, with a reading of the corresponding index of 3.5 points, compared to -14.1 integers the previous month.

“The sharp increase in the propensity to save this month It means that consumer sentiment continues its sharp decline and has reached a new all-time low,” said Rolf Bürkl, consumer expert at GfK.

In this sense, Bürkl pointed out that “the fear of energy costs significantly higher prices in the coming months is forcing many households to take precautions and set aside money for future bills,” which is further weakening consumer sentiment as there are fewer financial resources available for other consumption.

In fact, he warned that the situation could get even worse in the coming weeks and months if the Fuel supplyparticularly gas, is insufficient during winterwhich would cause a further increase in prices and heating bills.

On the other hand, the evaluation of the economic situation by consumers has stabilized, after two consecutive drops, with an advance of 0.6 points of the indicator, down to -17.6 points, although the risk of a recession remains high from the perspective of German consumers.

However, after the revenue expectations hit a record low last month, these increased slightly in August, when the indicator gained 0.4 points and now stands at -45.3 points. Compared to August 2021, this is a decrease of almost 76 points.

As a consequence, the propensity to buy has fallen 1.2 points, to -15.7 integers, thus accumulating seven consecutive months in decline and registering its worst level since the financial and economic crisisto October 2008.

Yes households have to pay much more for energy and foodthey lack the financial means for other purchases (…) In addition, in the context of significantly higher heating bills, several households are beginning to accumulate reserves to be able to pay them”, explained those responsible for the study.