German consumer confidence is forecast to fall to a record low in May as the war in Ukraine leads to rising costs for households and limits hopes of a post-pandemic recovery, a GfK institute survey showed. .
GfK forecasts its consumer confidence index, based on a survey of around 2,000 Germans, to fall to -26.5 points in May from a revised -15.7 in April.
That would mark a drop below the previous all-time low set in May 2020 during Germany’s first Covid-19 lockdown, then registering -23.1 points. Analysts polled by Reuters estimated the index would fall to -16 points on average.
“The war in Ukraine and high inflation rates have dealt a serious blow to consumer confidence. This means that hope for a recovery from the easing of pandemic restrictions has faded,” GfK consumer expert Rolf Buerkl said in a statement.
“There will only be a sustainable turnaround in consumer confidence if there are successful peace negotiations on the war in Ukraine,” Buerkl said. The survey was conducted between March 31 and April 11.
High rates of inflation are causing purchasing power to dwindle.