Sentiment among German consumers plunged to an all-time low, a key survey showed on Wednesday, as the aftermath of the war in Ukraine sent Europe’s biggest economy poised for a painful recession.
The Pollster GfK outlook barometer fell to minus 30.6 for August, its lowest level since records began in 1991, after a revised minus 27.7 in July.
“In addition to fears about interrupted supply chains, the war in Ukraine and a sharp rise in energy and food prices, there are now concerns about sufficient gas supplies for the economy and private households next winter,” GfK consumer protection expert Rolf Bürkl said in a statement.
A GfK survey of about 2,000 people found that Germans were significantly more pessimistic about the economic outlook than the previous month, with the sub-index hitting a low not seen since the pandemic began in April 2020.
“Fear is growing among consumers about an impending recession,” the statement said.
Russia’s war in Ukraine has pushed up energy prices, fueling already high inflation, which hit 7.6% in Germany in June.
There are also growing fears that cuts in Russian gas supplies will be disastrous for Germany this winter, which could lead to plant closures and force the government to implement emergency energy-saving measures.
The GfK survey also showed that respondents’ income expectations have fallen to a new record low and that they are less likely to buy expensive goods than a month earlier.