German consumers expect an exceptionally difficult October, extending an unprecedented period of pessimism to four consecutive months due to high inflation and energy costs that are 'devouring' their income, a survey by the GfK institute has shown.
The GfK consumer expectations index for October fell by 5.7 points compared to September, to minus 42.5 points. This marks a record low for the fourth consecutive month.
The biggest burden was the expectations regarding income, whose index plummeted by 22.4 points, to minus 67.7 points, the lowest level since GfK began conducting surveys for unified Germany in 1991.
– Currently, very high inflation rates of up to eight percent lead to a significant real decline in income and thus a noticeably reduced purchasing power – explains GfK consumption expert Rolf Bürkl.
– Many households are currently forced to spend significantly more money on energy or save for significantly higher heating bills – which leaves them with less money for purchases, Bürkl adds.
In August, inflation reached 8.8 percent, and the statistics office is expected to release preliminary figures for September on Thursday.
Negative real personal consumption will further worsen recessionary trends in the economy, warns GfK, emphasizing that there is currently no indication of when inflation might significantly weaken, so the coming months will be difficult for consumption.
Companies, on the other hand, show less interest in new workers, a separate report from the ifo institute has shown, with its employment barometer falling by 1.4 points in September, to 99.5 points.
