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German consumer mood slumps further as inflation bites
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A woman puts her groceries in her car in front of a supermarket in Kehl, Germany, on Oct. 15, 2020. (AFP/Frederick Florin )
G
erman consumer confidence remains on a record downward slide as Europe's largest economy faces soaring inflation and an energy crisis heading into winter, a key survey published Wednesday showed.
Pollster GfK's forward-looking barometer fell to minus 42.5 points for October, hitting a record low for the fourth month in a row, following a revised September reading of minus 36.8 points.
"The currently very high inflation rates of almost 8 percent are leading to large real income losses among consumers and thus to a significant reduction in purchasing power," said GfK consumer expert Rolf Buerkl.
"Many households are currently being forced to spend significantly more on energy," he added.
The leaders of Germany's 16 states will meet on Wednesday to discuss additional relief measures to help tackle the energy crisis -- but without Chancellor Olaf Scholz, who tested positive for COVID-19 earlier this week.
Inflation in Germany reached 7.9 percent in August, driven by soaring energy costs, with the pace expected to increase further by the end of the year.
"Consumer morale will only recover noticeably and sustainably if inflation is reduced," GfK said.
The dismal prediction for October was driven by a record low in income expectations for September.
Germany is expected to go into recession next year, according to the OECD, with Europe's biggest economy shrinking by 0.7 percent.
Germany has seen a drastic reduction in supplies of Russian gas since the invasion of Ukraine, causing an explosion in prices for the fuel.
