German consumer morale falls further as lockdown pushes up savings rate

BERLIN (Reuters) – German consumer morale fell a third month in a row heading into January as a stricter lockdown to contain a surge in coronavirus infections reduced income expectations and increased the propensity to save, a survey showed on Tuesday.

The GfK research institute said its consumer sentiment index, based on a survey of around 2,000 Germans, fell to -7.3 points from a revised -6.8 in the previous month.

This marked the lowest reading since July and came in slightly better than a Reuters forecast of -8.8.

Chancellor Angela Merkel and state leaders imposed a “lockdown lite” from Nov. 2, under which restaurants, bars and entertainment venues were closed while shops remained open.

As the measures failed to push down infection numbers, the government put in place stricter curbs from Dec. 16 which have shuttered most stores as well hair salons and other services.

“At present, the savings indicator is the main factor driving the third decline in a row in the consumer climate,” GfK researcher Rolf Buerkl said.

The survey chimes with data that showed a temporary reduction in sales tax, put in place by the government to stimulate domestic demand, has failed to turn anxious savers into big spenders.

As long as new COVID-19 cases remain high there is no improvement in sight which means any recovery can only be expected when infections drop so far that curbs can be loosened again, Buerkl said.

Senior government officials have said they expect the stricter lockdown measures, so far announced until at least Jan. 10, to be extended well into the new year.