According to the HDE consumer barometer, consumer sentiment is at its lowest point. The focus is on financial reserves and tax relief.

Consumer sentiment is at a low point at the beginning of the new year. Since the introduction of the HDE consumer barometer in October 2016, it has now reached its lowest level at 99.30 points.

“The HDE Consumption Barometer shows that consumer sentiment has deteriorated compared with the previous month. And January 2019 also did not perform well compared to the previous year,” says HDE CEO Stefan Genth. Since the second quarter of 2018, the consumption barometer has been below the previous year’s level.

HDE calls for consumer relief

As a consequence, the HDE calls for consumer relief to strengthen the domestic economy. According to the trade association, this also includes the reduction of the solidarity surcharge. “The domestic economy needs positive impetus. Small and medium-sized incomes in particular should be relieved considerably,” said Genth.

Genth thus points to the currently heated debate on tax relief in domestic policy. The CDU/CSU and SPD have so far planned a reduction of 10 billion euros for 2021, which should free 90 percent of the solidarity payers. The CDU/CSU, however, is increasingly calling for a complete abolition of the solidarity tax.

Consumer barometer shows: consumers tend to save money

According to the Handelsbaltt Research Institute (HRI), consumers, as well as companies and economic research institutes, expect a slowdown in overall economic growth. They therefore plan to increase their reserves generously. According to the HRI, however, the overall economic momentum will pick up again in the course of 2019, so that overall economic growth of two percent can be expected for 2020.

Private consumption will remain the main driver of this growth and is expected to increase by 1.1 percentage points in 2019. However, the consumers surveyed by the HDI are of the opinion that the economic slowdown will not yet affect their household income in the coming months.

Trade conflicts influence overall economic development

Corporate sentiment and economic forecasts are also falling. In contrast to the end of last year, these can no longer be compensated by the rising propensity to buy. “The overall economic development in Germany continues to be marked by a number of geopolitical risks. The trade conflicts with the USA are at the centre of these risks. But even the implementation of Brexit, which has still not been conclusively clarified, is subject to uncertainty,” according to a recent HDE press release.

 

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Link: Latest news from the HDE

Image: gettyimages

//CF