War and prices sink German consumer confidence to February 2021 lows

FILE PHOTO: People wearing face masks on Cologne's main shopping street

© Reuters/Wolfgang Rattay
FILE PHOTO: People wearing face masks on Cologne’s main shopping street

BERLIN, March 29 (Reuters) – German consumer confidence is likely to sink in April as the war in Ukraine has pushed household income and economic expectations to new record lows since the 2009 financial crisis, it showed. a poll on Tuesday.

Germany’s GfK institute said its consumer confidence index, based on a survey of some 2,000 German citizens, fell to -15.5 points for April, from a revised -8.5 points the previous month, the lowest. from February 2021.

Analysts polled by Reuters on average expected the index to fall to -14.0 points.

“In February, there was still hope that consumer confidence would pick up with the easing of pandemic-related restrictions. However, the war in Ukraine made these hopes dash,” Rolf Buerkl, an expert in GfK consumption.

Energy prices have suffered the most from increased uncertainty and sanctions against Russia, Buerkl said, adding that the long-term recovery of German consumer confidence will only be possible in the event of a rapid halt. the fire followed by peace negotiations.

“The domestic economy would once again make a significant contribution to overall economic development as a result of lessening uncertainty, and the easing of pandemic-related restrictions could also have its positive effect,” it said.

The survey was conducted between March 3 and 14, after Russian President Vladimir Putin ordered the invasion of Ukraine on February 24, kicking off the biggest war in Europe since World War II.

(Reporting by Zuzanna Szymanska; editing by Miranda Murray; translation by Darío Fernández)

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