Consumers - Buying appetite increases at the end of the year
Germans' buying mood improved significantly at the end of the year - but experts are pouring water on the wine again for the coming months. According to the Ifo economic research institute, the decline in inflation is likely to come to a halt. The proportion of companies in Germany that want to raise their prices in the coming months is increasing again, according to the Munich-based researchers.
According to a consumer survey conducted by the market research company GfK and the Nuremberg Institute NIM, both income expectations and the propensity to make major purchases improved noticeably at the turn of the year. In their forecast for January, the two institutes put the consumer climate at -25.1 points. This represents an increase of 2.5 points compared to the previous month. However, the consumer climate before the pandemic was around +10 points.
The experts expressed concerns about future developments. "It remains to be seen whether the current increase is the start of a sustained recovery in consumer sentiment," said NIM expert Rolf Bürkl. "Consumers are still very worried." Geopolitical crises and wars, sharply rising food prices and discussions about the federal budget are causing uncertainty. "As a result, the level of consumer confidence is currently still extremely low."
Less money for consumption
These concerns are supported by a survey conducted by the consulting firm AlixPartners. According to the survey, around 35% of Germans intend to spend less money on consumption in the coming year. This applies to spending on everyday products such as food, but also to areas such as electronics, leisure and DIY products as well as entertainment and gastronomy.
The consultants surveyed 10,000 consumers in seven countries in October and November, including 2,000 in Germany. The most important pillar of the slight improvement at the end of the year was income expectations. People could hope for higher wages and salaries.
At the same time, prices are also rising. Ifo price expectations rose to 19.7 points in December from 18.1 points in November. The experts expect more price increases in consumer-related service sectors. "Restaurateurs in particular want to increase prices noticeably," the institute said. The return to the normal VAT rate for food on January 1 is likely to play a role here. However, retailers are also increasingly planning price increases.
Lower energy prices had pushed the inflation rate in November to its lowest level since June 2021. Consumer prices were 3.2% higher than in the same month last year. According to many economists, the inflation rate is likely to rise to around 4 percent in December. Last year, the state covered the costs of the December discount for gas and district heating customers on a one-off basis. This effect no longer applies this year.
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Source: www.stern.de
