Frankfurt, Germany—The mood of consumers in Germany has darkened significantly as the Russian invasion of Ukraine dimmed the outlook for Europe’s largest economy, according to a key survey published Tuesday.
Pollster GfK’s forward-looking barometer fell to minus 15.5 percent for April from a revised minus 8.5 percent in March.
Hopes that the lifting of coronavirus-related health restrictions would propel an economic recovery had “evaporated” with the Russian invasion of Ukraine at the end of February, GfK consumer expert Rolf Buerkl said.
The shock was felt particularly hard by income expectations, which fell by 25 points to minus 22.1 in March, its lowest level since January 2009 in the midst of the financial crisis.
The conflict has given a new push to already high inflation, sending the cost for oil and gas rocketing amid fears that supplies from Russia could be severely curtailed.
Rising fuel bills means “consumers see their purchasing power melting away”, the GfK said in a statement.
Consumer prices rose at a rate of 5.1 percent in February, with new figures for March set to be published Wednesday.
Germany’s reliance on imports of Russian gas to heat its homes and power its industry meant the country was particularly vulnerable to the economic impact of the war.
The GfK survey of some 2,000 people found that Germans were significantly more pessimistic about the state of the economy, with the indicator falling 33 points to minus 8.9 in March, having risen in the last two months.
The impact of sanctions, high energy costs and supply chains broken by the outbreak of the war mean “the risk of a recession has risen sharply”, the pollster said.