German consumer confidence dips on lockdown woes

German consumers’ mood darkened at the end of 2020 due to new restrictions to tame a punishing second wave of coronavirus infections, a closely watched survey showed on Tuesday, December 22.

The GfK institute’s forward-looking survey of consumer confidence heading into January dipped to -7.3 points, down 0.5 points from its December level, which was revised to -6.8 points based on new data.

It was the 3rd decline in as many months for the survey as the economic toll of increasingly strict measures to curb the virus outbreak hits Germans’ pocketbooks.

“The lockdown and the closure of most shops really hit consumer confidence,” GfK’s Rolf Buerkl said in a statement.

In mid-December ahead of the crucial holiday shopping season, Germany shuttered all “non-essential” stores until at least January 10 to stem a sharp rise in new infections and deaths.

Europe’s top economy had already closed all bars, restaurants, and entertainment venues in November as well as hotels for tourists in a so-called “lockdown light” that failed to get the outbreak in check.

The GfK survey, based on around 2,000 interviews, found that German shoppers’ expectations for economic growth improved, to 4.4 points from -0.2.

But the institute noted that because the polling was conducted December 3 to 14, the effects of the latest restrictions had not yet been felt.

Personal income expectations fell by 1 point to 3.6 points and more than 3 in 4 Germans – 78% – said they thought COVID-19 represented a “large or very large threat.”

The German government has forecast a 5.5% contraction in gross domestic product for this year ahead of a 4.4% rebound in 2021 and 2.5% growth in 2022. – Rappler.com