German consumer morale slows down on path to recovery – GfK

BERLIN  – German consumer sentiment is set to nudge up in April as energy prices have relented somewhat from record highs, though a full recovery is not in sight anytime soon, showed a GfK institute survey on Wednesday.

The institute forecast its consumer sentiment index to improve to -29.5 heading into April from a revised reading of -30.6 in March, slightly below the expectations of analysts polled by Reuters of -29.0.

April’s reading, rising for the sixth month in a row, shows sentiment is on its way towards recovery, GfK said, but the pace of growth has slowed noticeably compared with previous months.

“The anticipated loss of purchasing power is preventing a sustained recovery of domestic demand,” said GfK consumer expert Rolf Buerkl, which means private consumption is not likely to contribute to the German economy in a positive way this year.

“This is also indicated by the still very low level of consumer confidence,” he said.

The subindex measuring income expectations was the main contributor to the increase in sentiment, rising to its highest level in 10 months, -24.3, in March from -27.3 in February.

“The income outlook is currently benefiting from noticeably lower prices for energy, especially for gasoline and heating oil. Nevertheless, inflation will remain high,” Buerkl said.

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