Inflation eating into German consumer confidence, says GfK

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Sentiment among German consumers is expected to ease in April, with a rise in inflation hindering buying power, according to the latest survey from research house GfK.

Consumer sentiment in Europe’s largest economy sent mixed signals in March, GfK said. Economic expectations and the propensity to buy recovering after a decline in the previous month, but income expectations fell a touch.

Overall, the reading for April’s consumer prognosis survey, which is based on the responses of about 2,000 people, came in at 9.8, down a touch from the reading of 10 in March. Economists polled by Bloomberg had expected a flat result.

GfK noted that a rise in inflation, spurring concerns over buying power, “hindered a full recovery of consumer sentiment in March this year”.

By historical standards, consumer sentiment is still high. Moreover, GfK said it sees a “light at the end of the tunnel for the current minor blip in the consumer climate, if the inflation rate is to fall again due to the current decline in crude oil prices.”

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