Germans turned to savings, consumer confidence fell

GfK, a Germany-based market research company, announced the results of the consumer confidence index for next month.

The consumer confidence index, measured at -25.6 points this month in Germany, decreased by 0.9 points to -26.5 points in October.

The statement states that the consumer confidence index, which in August was measured at -25.6 points for this month, decreased 0.9 points to -26.5 in October. The index was expected to fall to -26.

GfK researcher Rolf Buerkl analyzes the matter: “Although consumers’ economic expectations have increased slightly and both income expectations and purchasing tendencies have shown little growth, the savings tendency has increased significantly, which has caused a further decline in consumer confidence,” he said.

EMPHASIS ON ‘Persistently high inflation’

Buerkl emphasized that “stubbornly” high inflation caused by rising food and energy prices has weakened consumer confidence and that the chances of a recovery this year “have probably fallen to zero.”

According to GfK, the savings trend reached its highest level since April 2011, while Bürkl explained the cause as “consistently high inflation due to sharp increases in food and energy prices.”

GfK market researchers also see the labor market situation as a reason for consumer uncertainty about spending. Growing concerns about job losses are also negatively affecting consumer confidence.

“The increasing number of company bankruptcies increases the anxiety of many employees about losing their jobs,” GfK says in its statement. The statement was included.

COMPANIES ARE LESS WILLING TO HIRE

In the statement from the Institute of Economic Research (Ifo) it was reported that in September the desire of German companies to hire new personnel worsened.

The Ifo Employment Barometer, which was 97 points in August, fell to 95.8 points in September, the lowest level since February 2021.

“The strong employment expansion seen in recent months has stopped,” said Klaus Wohlrabe, director of the Ifo Survey Centre.

The German economy has failed to grow for three consecutive quarters due to rising interest rates, a weak global economy and high inflation. While the economy contracted 0.4 percent in the final quarter of last year and 0.1 percent in the first quarter of the year, it failed to grow in the second quarter of the year.

For this year, the Ifo expects a contraction of the German economy of 0.4 percent and the Kiel Institute for the World Economy (IfW) expects a contraction of 0.5 percent.

According to International Monetary Fund (IMF) forecasts, Germany will be the only G7 country expected to contract this year. (AA)