German consumer sentiment slumps in April on energy price fears, finds GfK

BERLIN: German consumer sentiment is set to deteriorate heading into April, as households brace for energy prices driven higher by the war in Iran to pump up inflation and hold back Germany’s fledgling economic recovery, a survey showed on Thursday.

The consumer sentiment index, published by the GfK market research institute and the Nuremberg Institute for Market Decisions, dropped 3.2 points to land at -28.0 for April.

Analysts polled by Reuters had expected a somewhat smaller drop, to -27.0 points.

Consumers’ income expectations plummeted into negative territory over fears inflation could eat into their buying power, as did their economic expectations, which were at their lowest level since December 2022. According to the survey, many consumers are concerned that the cautious recovery of the German economy could suffer a serious setback, especially if the conflict were to drag on.

“In a recent NIM study, 60percent of Germans state that they expect prices for oil, gas and petrol to remain high in the long term. This naturally has a negative impact on consumers’ mood,” said Rolf Buerkl, head of consumer climate at NIM.

Buerkl added that propensities to buy and to save are not yet showing the effects of the Middle East crisis.

Buying propensity showed only a 1.6-point drop on the month, to -10.9 points in March, while the inclination to save lost 0.4 points, to settle at a very high level of 18.5 points.