Thursday 26 November 2020 7:32 am

German consumer confidence slumps amid second wave of coronavirus

German consumer confidence halved in November, as the economy felt the weight of a second nationwide lockdown.

Chancellor Angela Merkel last night announced that “lockdown-lite” measures will extend until 20 December, after the country yesterday recorded its highest daily death rate, which rose by 410 in 24 hours.

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GfK, Germany’s largest market research institute, found that “both economic and income expectations as well as propensity to buy have declined” in Germany in November as a result of the restrictions.

In its Consumer Climate Study, GfK forecast a consumer confidence figure of minus 6.7 for December 2020, 3.5 points down from October this year.

“Though stores will remain open, the renewed shutdown of the hotel, restaurant and events industry — as well as the already struggling tourism industry — has had a serious impact on the consumer climate,” explains Rolf Bürkl, consumer expert at GfK.

“As a result, any hope we still had in early summer of a rapid recovery is now lost. Growing uncertainty has once again led to an increase in propensity to save, another factor which has contributed to the decline in the consumer climate.”

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Germany’s second national lockdown came into effect at the start of November, knocking consumer hopes of a V-shaped economic recovery.

GfK noted that German exports will be significantly compromised in the coming months, as some of its most important trading partners, such as France, Italy, Spain and the UK have been much harder hit by Covid-19 and have introduced tougher measures to contain the virus.