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Inflation weighs on consumer morale in euro zone's big three economies

       BERLIN, Sept 28 (Reuters) -
    Consumer morale was down across the euro zone's three
largest economies as high inflation shows no sign of relenting
heading into winter, according to surveys on Wednesday.

    German consumer morale is projected to hit a new record low
for the fourth consecutive month heading into October, according
to the GfK institute, which said any recovery in consumer
sentiment would be tied to getting inflation under control.
    The GfK's consumer sentiment index fell to -42.5 heading
into October, from a downwardly revised reading of -36.8 in
September and lower than a reading of -39.0 predicted by
analysts polled by Reuters.
    Income expectations in particular contributed to the plunge
in morale: that subindex was at its lowest level since the
survey began collecting data for unified Germany in 1991.
    French consumer sentiment also deteriorated once again in
September, after a brief recovery in August put an end to seven
months in a row of decline on worries about inflation, a monthly
survey by the INSEE national statistics office showed.
        Italian shoppers were equally downbeat ahead of the
election, with national statistics institute ISTAT's
    consumer morale index
     in September falling to 94.8, barely missing a median
forecast by analysts polled by Reuters of 95.1.

        Euro zone inflation is approaching
     double-digit territory
     in the coming months, driven ever higher by energy costs as
Russian gas supply has become unreliable,
    making the prospect of a recession
     in the 19-nation shared-currency bloc likely.

        Germany's IMK institute on Wednesday predicted a
broad-based recession for the euro zone's largest economy in
2023 as significant declines in private consumption weigh on
growth.

        An increasing number of German consumers fear the
economy could slide into recession, said GfK, with economic
expectations at the same low levels as during the financial
crisis.
                                OCT 2022  SEP 2022  OCT 2021
 Consumer climate               -42.5     -36.8     0.4
 Consumer climate components    SEP 2022  AUG 2022  SEP 2021
 - willingness to buy           -19.5     -15.7     13.4
 - income expectations          -67.7     -45.3     37.4
 - business cycle expectations  -21.9     -17.6     48.5
    NOTE - The survey period was from Sept. 1-12, 2022.
    The consumer climate indicator forecasts the development of
real private consumption in the following month.
    An indicator reading above zero signals year-on-year growth
in private consumption. A value below zero indicates a drop
compared with the same period a year earlier.
    According to GfK, a one-point change in the indicator
corresponds to a year-on-year change of 0.1% in private
consumption.
    The "willingness to buy" indicator represents the balance
between positive and negative responses to the question: "Do you
think now is a good time to buy major items?"
    The income expectations sub-index reflects expectations
about the development of household finances in the coming 12
months.
    The additional business cycle expectations index reflects
the assessment of those questioned of the general economic
situation in the next 12 months.
 (Reporting by Miranda Murray, editing by Rachel More, Catherine
Evans and Mark Heinrich)

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