Germany's Second Partial Lockdown Weighs On Consumer Morale
German consumer morale fell further heading into December as a partial lockdown to curb a second coronavirus wave in Europe's largest economy hit households' income expectations as well as their willingness to buy, a survey showed on Thursday.
The GfK institute said its consumer sentiment index, based on a survey of around 2,000 Germans, dropped to -6.7 in November from a revised -3.2 in the previous month.
The reading missed a Reuters forecast for a narrower drop to -5.0. GfK consumer expert Rolf Buerkl said although retail shops had been kept open so far, the closure of restaurants, bars, hotels and entertainment venues since 2 November clouded consumers' mood.
Rising numbers of COVID-19 are increasing uncertainty so Germans hold more onto their money, Buerkl added.
"The hopes for a rapid recovery that arose in early summer have definitely been dashed," Buerkl said.
German business morale also fell in November, suggesting that the economy will shrink in the fourth quarter due to the renewed curbs, the Ifo institute said on Tuesday.
Germany's infection rates have been accelerating and cases are close to reach one million, with daily COVID-19 deaths hitting a record 410 on Wednesday.
Chancellor Angela Merkel agreed with leaders of Germany's 16 federal states to extend and tighten measures against the coronavirus until at least 20 December and they are likely to extend them into January, she said on Wednesday.
"Only a noticeable decrease in infections and a relaxation of the restrictions will bring more optimism again," Buerkl said, adding that the infection rate in the coming weeks will determine whether consumer sentiment could stabilise again.