In its monthly study in Germany this May, GfK market researchers found consumer sentiment that has been “rather bright than muted,” because of falling illness rates and success in Covid-19 vaccinations. With more employees coming out of short-time or remote work and incremental re-openings of stores and restaurants, conditions are good for a significant recovery in consumer sentiment, GfK said. As a result of the persistent retail lockdowns, broad sections of private households have accumulated substantial financial reserves. This is reflected in the increased savings rate of private households, which rose to roughly 16 percent during the pandemic, up from between 10 and 11 percent in 2019, making considerable funds available for potential catch-up. In spite of increased confidence in the economy, the propensity to buy has suffered moderate losses, with the indicator dropping by 7.3 points to a current value of 10 points, after three consecutive increases. This is still 4.5 points higher than the corresponding figure for the previous year. Despite some partial store openings and easing measures that have been implemented or announced to date, a number of consumption options, especially in service sectors, are still not available or only possible to a very limited extent. This is likely to put the brakes on any noticeable revival in consumers’ shopping wishes at present. Some observers predict that the turnaround in consumption will only take place in the second half of this year.
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