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REFILE-Coronavirus pushes down German consumer morale to record low

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    By Riham Alkousaa
    BERLIN, April 23 (Reuters) - German consumer morale reached
a record low heading into May as the coronavirus pandemic and
measures to contain the outbreak slammed the mood among
shoppers, a survey showed on Thursday.
    The GfK consumer sentiment indicator, based on a survey of
2,000 Germans, entered negative territory, dropping to -23.4
points from a revised 2.3 in the previous month.
    The reading undershot a Reuters poll of analysts who had
forecast a much less significant drop to -1.8.
    "The consumer climate is currently in free fall," Rolf
Buerkl, a researcher for Nuremberg-based GfK, said in a
statement, adding that a value of -23.4 was unprecedented in the
history of the consumer climate survey.
    "Retailers, manufacturers and service providers must prepare
for an imminent, very severe recession," Buerkl said. Consumer
sentiment would remain subdued in the coming months as measures
to curb the outbreak would be eased only slowly.
    The drop was exacerbated by a spike in consumers' propensity
to save in the crisis, GfK said.
    Production shutdowns, shops' closures and supply chain
disruptions forced many companies to put employees on short-time
work schemes, hitting consumers' income and economic
expectations, the survey showed.
    A subordinator for consumers' income expectations in April
recorded the biggest drop since the survey started in 1980.
    "The fear of job loss has risen sharply among many
employees," Buerkl said. "This is a significant barrier to
consumption, which is intensified by the fact that closed shops
often make it impossible to buy stuff."
          
                                 May 20    April 20  May 19
 Consumer climate                -23.4     2.3       10.2
 Consumer climate components     April 20  March 20  April 19
 - willingness to buy            -4.6      31.4      53.1
 - income expectations           -19.3     27.8      56.8
 - business cycle expectations   -21.4     -19.2     3.0
 
    NOTE - The consumer climate indicator forecasts the 
development of real private consumption in the following month. 
    An indicator reading above zero signals year-on-year growth 
in private consumption. A value below zero indicates a drop in 
comparison with the same period a year ago.
    According to GfK, a one-point change in the indicator
corresponds to a year-on-year change of 0.1 percent in private
consumption.
    The "willingness to buy" indicator represents the balance
between positive and negative responses to the question: "Do you
think now is a good time to buy major items?"
    The income expectations sub-index reflects expectations
about the development of household finances in the coming 12
months. 
    The additional business cycle expectations index reflects
the assessment of those questioned of the general economic 
situation in the next 12 months. 
    
      
      

 (Reporting by Riham Alkousaa, editing by Michael Nienaber)
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