BERLIN (Reuters) – German consumer sentiment is expected to continue to deteriorate in October as persistently high inflation encourages saving and makes a near-term recovery in consumption unlikely, according to a GfK survey released Wednesday.
The index calculated by GfK went from -25.6 (revised) in September to -26.5 for the month of October while economists polled by Reuters expected -26.0.
This slight decline for the second consecutive month is mainly linked to an increase in consumers’ propensity to save, which reached 8.0 points in September, its highest level since April 2011, after a reading of only 0.5 a month earlier, according to GfK.
“This means that the chances of a recovery in consumer sentiment are probably zero by the end of the year,” said GfK consumer expert Rolf Buerkl.
“Private consumption will therefore not contribute positively to economic growth this year.”
Domestic demand will only improve when inflation is brought down to a tolerable level, GfK said, adding that it was not yet possible to predict when this target would be achieved.
(Written by Mirranda Murrey, Corentin Chappron, edited by Kate Entringer)
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