BERLIN (Reuters) – German consumer sentiment is expected to drop to a historic low in May, a survey showed on Wednesday, as the war in Ukraine raised costs for families and undermined hopes of a post-pandemic recovery. The GfK Institute said the consumer confidence index, based on a survey of about 2,000 Germans, fell to -26.5 points before May from a revised -15.7 points the previous month, with the main index falling more than the previous record set in May 2020 during the first Lockdown in Germany due to COVID-19. Analysts polled by Reuters had expected the index to fall to -16.0 on average. “The war in Ukraine and high inflation rates have dealt a severe blow to consumer sentiment,” Rolf Buerkel, consumer expert at GfK, said in a statement. This means that hopes for a recovery after the easing of restrictions related to the epidemic have finally been dashed. The war, which began with Russia’s military attack on Ukraine on February 24, has led to a sharp rise in energy prices and widespread sanctions against Moscow, both of which reduced the purchasing power of consumers, GfK said. He added that the decline in consumer confidence was accelerated by a significant increase in propensity to save in April. “There will be no sustainable shift in consumer sentiment unless there are successful peace negotiations over the war in Ukraine,” Boerkel said. The survey was conducted from March 31 to April 11.
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