Germany’s consumer confidence is set to improve in November from a record low even in the midst of recession fears, survey results from the market research group GfK showed on Thursday.
The forward-looking consumer sentiment index rose to -41.9 in November, in line with expectations, from revised -42.8 in October.
It is too early to speak of a trend reversal in consumer confidence, said Rolf Bürkl, GfK consumer expert. The situation remains very tense.
As long as inflation remains high and there are concerns about energy supply, the consumer climate will not be able to recover noticeably and sustainably, Bürkl added.
Among sub-indices of consumer confidence, the income expectations indicator rose 7.2 points to -60.5 in October from a record low.
Likewise, the propensity to buy index gained two points to -17.5. Propensity to buy is likely to remain low in the coming months as households will have to spend more on heating, leaving less money for other purchases.
However, the economic expectations index dropped 0.3 points to -22.2 in October.
Consumers assumed that Germany will slide into a recession. Experts confirmed this assessment and forecast that the gross domestic product will fall by around half a percent in 2023, GfK said.
Preliminary estimates from Destatis, due on Friday, are expected to reveal a quarterly decline of 0.2 percent in the economic output, following a very modest 0.1 percent expansion in the previous three months.
In the October monthly report, Bundesbank said the German economy is probably on the brink of a recession. Economic output could fall significantly overall in the fourth quarter of 2022 and first quarter of 2023. However, the extent of the decline is extremely uncertain.
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