Data published by GfK Group showed that economic expectations rose slightly in February, but income expectations and propensity to buy decreased compared to January. As a result, the consumer confidence index for March fell to -8.1 points compared to -6.7 points in February. Economists had expected the index to improve to -6.3 points.
"A sharp increase in the incidence of coronavirus (at the time of the survey), as well as high inflation, negatively affected consumption. In general, expectations of a significant weakening of inflation at the beginning of the year have not yet been met," said Rolf Buerkle, GfK consumer goods expert. "However, expectations for the coming months are very positive, due to the lifting of serious restrictions related to the pandemic."
The report showed that the index of consumer expectations regarding the economy rose to 24.1 points from 22.8 points in January. Thus, consumers are likely to expect further German GDP growth in 2022 after a weaker first quarter. Meanwhile, the income expectations index fell to 3.9 points from 16.9 points, and reached the lowest value since January 2021. The drop in the index was due to high inflation, which weakens purchasing power. As for the propensity to buy index, it fell to 1.4 points from 5.2 points in January.