Mideast war hits German consumer confidence: Survey

FRANKFURT

German consumer sentiment fell heading into April due to the Middle East war, a survey showed on Thursday, adding to the woes facing Europe's top economy.

The forward-looking indicator, published by pollsters GfK and the Nuremberg Institute for Market Decisions (NIM), fell 3.2 points to minus 28.

German consumers' current purchasing power as well as their tendency to save changed only slightly in the survey, but expectations of their future incomes plunged 12.6 points as pessimism mounts.

The reading in the regular poll of about 2,000 people "indicates a noticeable deterioration in consumer confidence," Rolf Buerkl, head of consumer climate at NIM said.

"Consumers are expecting inflation to take off again and the economic recovery to be held back as a result of higher energy prices."

It was the latest gloomy economic news from Germany; morale among businesses and investors also registered sharp drops in regular surveys released this week.

Oil and natural gas prices have surged since the end of last month, when the United States and Israel began attacking Iran, plunging the Middle East into turmoil.

Though the European Central Bank has said it is unlikely that inflation will reach the heights seen after Russia's full-scale invasion of Ukraine in 2022, Buerkl said hostilities were nevertheless weighing on consumers.