The results of the Consumer Confidence Index for next month, prepared by the market research company GfK headquartered in Germany and the Nuremberg Institute for Market Decisions, have been announced.
Accordingly, the Consumer Confidence Index, measured as minus 21 points for October, increased by 2.7 points to minus 18.3 points for November. Thus, the Consumer Confidence Index in the country continued to remain well below the long-term average value of 10 points, with minus 18 points. The expectation was that the index would be minus 20.5.
In the statement, increasing purchasing desire and especially more optimistic income expectations were cited as the reason why consumer confidence continued to recover, and although minus 18.3 was the highest value seen since April 2022, it was stated that consumer confidence still remained low.
NIM Consumer Research Expert Rolf Buerkl, in his evaluation of the data, stated that the uncertainty caused by crises, wars and rising prices is still very evident at the moment, and noted that these prevent positive factors for consumption, such as visible real income increases, from showing their full effect.
“The increase in company bankruptcies and news of plans to lay off workers and move production abroad also prevent a more significant recovery in consumer confidence,” Buerkl said. he said.
Annual inflation in Germany was recorded as 1.6 percent in September.
Analysts expect annual inflation to rise moderately to 1.8 percent this month.
Contrary to consumer confidence, German consumers are once again pessimistic about economic developments over the next 12 months, GfK market researchers report.
THE GERMAN ECONOMY FACES THE RISK OF ENTERING A RECESSION AGAIN
After 10 years of economic growth, Germany experienced recession for the first time since 2009 in 2020, the first year of the epidemic.
On September 5, Ifo reduced the country’s growth forecast for 2024 and next year from 0.4 percent to zero due to the weak investment and order situation.
The International Monetary Fund (IMF) also reduced Germany’s growth expectation for this year from 0.2 percent to zero on October 22.
The German economy shrank by 0.3 percent last year compared to the previous year due to reasons such as unusually high inflation affecting purchasing power, high energy prices, falling investments, weak foreign demand and high interest rates.
The country was the only country among the G7 countries to shrink. If Germany shrinks again this year, it will be the only country among the G7 economies to shrink as it did in 2023.
The German government aims to stimulate the economy with a growth package called “Growth Initiative-New Economic Dynamics for Germany”.
The package includes 49 measures in five areas, such as strengthening competitiveness, reducing bureaucracy, better work incentives, an efficient financial center for a strong economy and an efficient energy market for the economy of tomorrow.
The country’s third-quarter GDP data will be announced on October 30.
