Consumer Confidence in Germany Falls to Lowest Level Since May - GfK

Consumer confidence in Germany has fallen to its lowest level since May, reflecting declining income expectations, increasing concerns about job losses, and fears of an impending recession. According to GfK and the Nuremberg Market Decisions Institute, the consumer climate index for Europe's largest economy dropped by 4.9 points in December forecasts to minus 23.3, weaker than the consensus expectation of minus 19.

The anticipated increase in consumer spending has not materialized, and the persistent high energy prices alongside a weak global environment for Germany's exports have continued to impact production declines, diminishing initial hopes for a cautious economic recovery throughout the year.

The country's ruling coalition collapsed earlier this month due to a disagreement over public borrowing, while the election of President Donald Trump has introduced new headaches for businesses through promised tariffs on foreign imports. Growth forecasts have been revised downward, and the European Commission now expects the economy to contract this year.

According to a survey, Germans have increased their pessimism about the economy for the fourth consecutive month. NIM consumer expert Rolf Buerkl noted that concerns about job losses, in particular, have risen, following recent announcements of job cuts at Thyssenkrupp and Ford, as well as the threat of factory closures at Volkswagen.