German consumer morale is likely to slump next month as the war in Ukraine pushed consumer expectations to their lowest since the 2009 global financial crisis, according to a survey published on Tuesday.
The GfK institute said its consumer sentiment index, based on a survey of around 2,000 Germans, plunged to -15.5 points heading into April from a revised -8.5 points in February.
“In February, hopes were still high that consumer sentiment would recover with the easing of pandemic-related restrictions. However, the war in Ukraine caused these hopes to vanish into thin air,” said GfK consumer expert Rolf Buerkl.
He added that energy prices have suffered the most from rising uncertainty and sanctions against Russia, with a longer-term recovery of German consumer morale only possible if there was a quick ceasefire followed by peace talks.
“Domestic economy would then significantly contribute to overall economic development again as a result of declining uncertainty, and the easing of pandemic-related restrictions would also be able to have its positive effect,” he said.
The survey took place from March 3 to March 14, after Russia’s unprovoked invasion of Ukraine on February 24.