BERLIN (Reuters) – German consumer morale fell further into December as a partial lockdown to curb a wave of the coronavirus in Europe’s second largest economy hit household income expectations as well as their willingness to buy, a survey showed on Thursday.
The GfK Institute said its consumer sentiment index, based on a survey of about 2,000 Germans, fell to -6.7 in November from -3.2 in the previous month.
The figure missed Reuters forecasts for a narrower decline to -5.0.
GfK consumer expert, Rolf Buerkl, said although retail shops have remained open so far, the closure of restaurants, bars, hotels and entertainment venues since November 2 has clouded consumers’ moods.
The increasing number of COVID-19 increases uncertainty so that more Germans are holding back their money, Buerkl added.
“The hopes for a speedy recovery that emerged in early summer are definitely dashed,” said Buerkl.
German business morale also fell in November, suggesting that the economy will shrink in the fourth quarter due to new restrictions, the Ifo agency said on Tuesday.
Germany’s infection rate has risen and its cases are close to one million, with daily deaths from COVID-19 hitting a record 410 on Wednesday.
Chancellor Angela Merkel agreed with the leaders of Germany’s 16 federal states to extend and tighten measures against the coronavirus until at least December 20 and they are likely to extend this to January, he said on Wednesday.
“Only a real drop in infections and easing of restrictions will bring even more optimism,” said Buerkl, adding that the rate of infection in the coming weeks will determine whether consumer sentiment can stabilize again.
The consumer climate indicator predicts the development of real private consumption in the following month.
A reading of the indicator above zero indicates growth in private consumption from year to year. Below zero values indicate a decrease compared to the same period last year.
According to GfK, a one-point change in the indicator corresponds to a 0.1 percent year-on-year change in private consumption.
The “willingness to buy” indicator represents a balance between positive and negative responses to the question: “Do you think now is a good time to buy big things?”
The income expectations sub-index reflects expectations about developments in household finances in the next 12 months.
The additional business cycle expectations index reflects the assessment of those who question the general economic situation in the next 12 months.
Reporting by Riham Alkousaa; Edited by Michael Nienaber