Despite a certain stabilization in the economy as a whole, consumer sentiment in Germany fell noticeably for the first time in twelve months in November, according to the latest consumer barometer from the German Retail Association (HDE). As a result, private consumption is no longer expected to stimulate growth in the ongoing year.
Consumers are decoupling from the stabilization that has slowly become noticeable for the economy as a whole, with the HDE consumption barometer falling significantly for the first time since October 2022. Although expectations in the German economy have improved, the consumers surveyed do not share this optimism. Despite the fact that the current level is still noticeably higher than a year ago, the recovery in the summer months is already a thing of the past. The HDE consumption barometer is effectively at the same level as in May of this year and, therefore, still well below the pre-pandemic level. The tense geopolitical situation, especially after the current events in the Middle East, is likely to have contributed to the uncertainty among consumers. As a result, people in Germany are planning less spending, and their propensity to save their money is increasing. This means that hardly more than an economic stabilization can be expected in the remaining weeks of this year. According to the HDE, there will no longer be any noticeable growth impetus from private consumption in 2023.
