German consumer confidence grows as energy prices fall

Published January 24th, 2023 - 12:24 GMT
German consumer confidence grows
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ALBAWABA — German consumer confidence improved at the start of the new year, a key survey showed on Tuesday, driven by moderating energy prices, in part due to cost-cutting measures to offset inflation by the German federal government.


Market research group GfK said data from its forward-looking survey of around 2,000 people climbed 3.7 points to reach -33.9 points for February.


“Falling energy prices, such as for gasoline and heating oil, have ensured that consumer sentiment is less gloomy,” Rolf Buerkl, GfK’s consumer expert, said.


“With the fourth increase in a row, the positive trend in consumer sentiment is consolidating. Even though the level is still very low, pessimism has eased recently,” he added.


Buerkl warned that the indicator was still at a “very low level” overall and that the months ahead would remain "difficult" for Europe's top economy.


"Private consumption will not be able to make a positive contribution" to economic growth this year, Buerkl said.


In the GfK report, German consumers’ inclination to buy fell in January to -18.7 from minus -16.3, highlighting elevated consumer apprehension over energy prices, with many households putting money aside for anticipated significantly higher heating bills in the months ahead. 


After Russia's invasion of Ukraine sent energy prices soaring, the German government unveiled a 200-billion-euro support package.


“Consumers are apparently increasingly gaining the impression that the recession which many experts expected for the German economy this year will be less severe than feared just a few weeks ago, and may even be avoided altogether,” the GfK report said.


Last week, Chancellor Olaf Scholz said he expects the German economy to narrowly miss a recession in 2023.



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