By Joshua Kirby
Germany's consumer confidence looks set to slump in February as shoppers save rather than spend amid a wintry economic landscape.
A forward-looking consumer-sentiment index set out Friday forecasts confidence to plunge sharply to minus 29.7 in February from minus 25.4 this month. The index, published by research group GfK and the Nuremberg Institute for Market Decisions, comes in well below economists' expectations for a slight uptick to minus 24.5, according to a poll compiled by The Wall Street Journal.
Reluctance to spend comes amid gloomier outlooks for personal incomes and the general economy, the survey showed, while consumers are also now keener to save their salaries.
"The improvement in consumer sentiment last month was apparently just a brief flare-up before Christmas," said Rolf Buerkl, consumer expert at NIM. "The consumer climate suffered a severe setback at the beginning of the year," he said.
Inflation remains a key concern for German shoppers, the survey showed. The issue is well ahead of others, such as political and economic uncertainty, the report said.
The report offers little hope of a boost to the foundering German economy at the start of the year. The outlook for business is worsening, purchasing managers' data showed this week, while sentiment among the private sector is similarly bleak, with firms increasingly worried about their prospects for the coming months, survey data showed Thursday.
"These results indicate that hopes for a sustained recovery in consumer sentiment have to be postponed further into the future," the GfK/NIM report said. "Crises and wars, as well as persistently high inflation, make consumers feel insecure and thus prevent a rise improvement in consumer sentiment."
Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby
(END) Dow Jones Newswires
01-26-24 0214ET
