New virus wave, inflation cool German consumers’ mood

FRANKFURT: German consumer sentiment worsened for the second month running, a key survey said on Tuesday, as Europe’s largest economy braces itself for rising inflation and the spread of the Omicron coronavirus variant.

Pollster GfK’s forward-looking barometer fell to -6.8 from a revised figure of -1.8 for December.

“The high incidence of the virus due to the fourth wave of the coronavirus pandemic with further restrictions and higher prices are increasingly weighing on the consumer climate,” GfK consumer expert Rolf Buerkl said.

New rules barring the unvaccinated from non-essential shops had dealt retailers “a hard blow”, Buerkl said.

Warnings that the Omicron variant could begin to spread quickly in the country had also “dampened prospects for the new year”, he said.

Already under pressure from rising infections in recent weeks, Germany could face a “massive fifth wave” of the virus caused by the more infectious new strain, Health Minister Karl Lauterbach said on Friday.

On inflation, consumer prices rose at an annual rate of 5.2 per cent in November, a 29-year high driven by the soaring cost of energy and widespread supply bottlenecks.

The GfK survey of some 2,000 people found that Germans were significantly more pessimistic about the state of the European Union’s largest economy than last month, the third drop in a row for that subsection of the survey.

Income expectations also dropped, while the willingness to splash out on big purchases fell to levels not seen since the beginning of 2021, the pollsters said.

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