BERLIN (Reuters) – German consumer sentiment is expected to pick up in April as energy prices fall, but a lasting improvement is still a long way off, a GfK survey showed on Wednesday.
The index calculated by GfK fell from -30.6 in March (revised from -30.5) to -29.5 while economists polled by Reuters were anticipating -29.2.
This is the sixth consecutive month of improvement but the pace has slowed significantly compared to previous months, notes the institute.
“The anticipated loss of purchasing power is preventing a sustainable recovery in domestic demand,” said Rolf Bürkl, head of consumer affairs at GfK.
According to him, private consumption should not contribute positively to the German economy this year.
The sub-index measuring earnings outlook was the main contributor to the upturn in sentiment. In March, it reached its highest level in 10 months, at -24.3, after -27.3 in February.
“Income prospects are currently benefiting from a significant drop in energy prices, especially gasoline and heating oil. Nevertheless, inflation will remain high,” warned Rolf Bürkl.
(Report Miranda Murray; Claude Chendjou, edited by Kate Entringer)
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