The current course of the pandemic and the prospect of an imminent fifth wave with the Omicron variant are dampening consumer sentiment, the German Retail Association (HDE) has said.
Private consumption is therefore likely to develop rather cautiously in the first quarter of the new year, it added.
HDE Consumption Barometer
The HDE consumption barometer fell further in January compared to the previous month and is close to the low levels recorded in the same month last year.
It is expected that the negative trend will continue at the beginning of 2022.
The current fourth coronavirus wave and the expected fifth wave of infections are depressing economic expectations and the mood in the economy, HDE said
In contrast to the previous month, however, the respondents are surprisingly somewhat more optimistic about the further development of their own income situation.
Major growth impulses for private consumption are not expected in the first quarter of 2022.
A further deterioration in the HDE consumption barometer looks likely for February, as consumers surveyed were not yet able to fully take into account the latest developments and the latest measures to contain the infection rate in their answers – the previous survey period ended on December 19, 2021.
The HDE consumption barometer appears monthly and is based on a survey of 1,600 people on the propensity to buy, save, the financial situation, and other consumption-related factors.
It does not reflect current consumer behaviour, but rather measures the expected mood over the next three months.