German consumer morale darkens - GfK

German consumer morale will fall further at the start of next year.

That's according to a leading survey released on Tuesday (December 21).

The Gfk market research institute said its consumer sentiment index fell to -6.8 points heading into January - its lowest reading since June.

Gfk researcher Rolf Buerkl blamed the spread of the Omicron variant and other economic factors.

"Consumer sentiment is currently affected by two things: one is the fourth wave of the COVID pandemic along with the threats originating from the Omicron variant. Also, there was a strong price increase. The inflation rate in November climbed to above 5% in Germany which is a very high figure and traditionally, that negatively affects consumer sentiment."

Prospects for early next year look grim.

That as industry is still dealing with supply shortages and the potential for further restrictions.

Earlier this month the country's Ifo institute projected Germany's economic output to shrink by 0.5% on the quarter over October to December.

It also predicted output would stagnate from January to March.

This would bring Germany close to a technical recession - which is defined as two consecutive quarters of contraction.

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