German consumer morale drops

The mood among German consumers darkened heading into September as accelerating inflation and rising Covid-19 cases made them more hesitant to buy, a survey showed yesterday. 

The GfK institute said its consumer sentiment index, based on a survey of around 2,000 Germans, dropped to -1.2 points for September, from a revised -0.4 points a month earlier. The reading compared with a Reuters forecast for -0.7.

"Prices have been rising rapidly since the middle of this year. This has a dampening effect on the consumer mood," GfK consumer expert Rolf Buerkl said in a statement. Germany's harmonised annual consumer prices rose 3.1 per cent in July, hitting a 13-year high and fuelling a debate about whether the increase in the cost of living will persist.

An increase in coronavirus infections and a slower pace of vaccinations have also hit consumers' expectations for the economy and affected their propensity to buy, Buerkl added.

Germany reported 11,561 new coronavirus infections yesterday and a seven-day incidence rate of 61.3 per 100,000 people, according to the Robert Koch Institute for infectious diseases.

Some 59.4 per cent of the population are fully vaccinated with around 64.4 per cent having received at least one dose.