In April, German consumer sentiment should improve

With decreased German energy prices as a driving factor, consumer confidence in Germany should rise again in April, marking the sixth increase in as many months. But, as recession fears grow, momentum in the month slowed.

Statistics from market research firm GfK suggest that Germany’s consumer-sentiment index should grow to minus 29.5 in April, up from the revised figure of minus 30.6 in March. If the prediction turns out to be accurate, it will be the highest level since July 2022.

The reading is below the consensus prediction of minus 29.0 made by economists surveyed by The Wall Street Journal. According to GfK, the survey was conducted between March 2 and March 13. As a result, respondents are likely to have missed much of the instability in the banking industry that ended in the acquisition of Credit Suisse Group AG by UBS Group AG in neighbouring Switzerland.

Rolf Buerkl, a GfK consumer analyst, has remarked that income prospects have grown more auspicious in light of the recent steep drop in gas and heating oil prices. He claimed that the predicted loss of purchasing power brought on by growing inflation is preventing a recovery in demand.

GfK takes information from three subindices from the current month to calculate the sentiment index for the upcoming month. The data showed that while willingness to buy and income expectations both increased in March, economic expectations decreased following four months of growth.

According to GfK, the latter indicates that a technical recession is once more likely, with a modest fall in GDP possible in the first quarter of 2023 following a 0.4% contraction in the final three months of 2022. But, the company stated, experts presently anticipate a modest recovery in the German economy in the second half of the year.

German consumer confidence declines on the road to recovery

According to a GfK institute survey released on Wednesday, German consumer mood should slightly improve in April as energy costs have moderated from record highs. But, a full recovery is not expected any time soon.

According to the institute, the consumer sentiment index will rise to -29.5 in April from a revised reading of -30.6 in March, which is somewhat less than the -29.0 projection of analysts surveyed by Reuters.

According to GfK, April’s reading, which increased for the sixth consecutive month, indicates that sentiment is on the mend. However, the rising rate has considerably decreased compared to earlier months.