Christmas's economic impact leaves German consumers cold

Findings of the GfK consumer climate survey in December 2003

Five percent less Christmas business than in the previous year - the consumer's mood was not as up in December as trade had been hoping for up until the end of November. GfK's consumer climate study confirmed this in December. In the last month of the year 2003 the more positive mood of the consumer in November had again already come to an end.

Whilst financial analysts (ZEW) and companies (ifo) stand by their positive assessment of the economic development at the year end, it must be said that the buoyant mood of November did not spill over into December to quite the same extent, though can be considered comparable. However, personal expectations on the subject of personal income developments have yet again been clouded. Moreover, their propensity to buy, which had clearly increased in November, dropped again to October's level.

However, it can be assumed that the uncertainty of the German consumer regarding future tax burdens and relief also played a part in the stagnation of the consumer climate. Now that the Federal Government and the opposition have managed to reach a decision regarding the tax reform, the prospect has improved of there being a slight upward trend after a month of standstill. However, a fundamental and continuing improvement is only to be expected if there are more positive signs from the job market.