German consumer morale for May set to hit historic low

By Aysu Bicer

ANKARA (AA) - German consumer morale is set to fall to a historic low in May as the war-driven cost of living for households continue to rise, according to Nuremberg-based market researcher GfK.

GfK is forecasting minus 26.5 points for consumer sentiment in May, a fall of 10.8 points from April, with both economic and income expectations, along with propensity to buy, set to drop.

"The war in Ukraine and rates of high inflation have dealt a severe blow to consumer sentiment," said the company.

"This means that hopes of a recovery from the easing of pandemic-related restrictions have finally been dashed. There will only be a sustainable trend shift in consumer sentiment if there are successful peace negotiations on the war in Ukraine."

Based on interviews with around 2,000 consumers, the survey was done on behalf of the European Commission from March 31 to April 11 to gauge sentiment for May.

Meanwhile, annual inflation in Germany, which was 5.1% in February, reached its highest level in 40 years, reaching 7.3% in March with recent rises in food, oil, and gas prices due to the Russia-Ukraine war, which is now over two months old.

Economists say double-digit inflation rates are possible in Germany in the near future.