BERLIN, (Reuters) – German consumer sentiment looks set to plummet heading into April after the war in Ukraine pushed household income expectations and their economic performance to record lows following the financial crisis of 2009. A Tuesday survey revealed that this was the result.

According to the GfK institute, its index of consumer sentiment, which is based on an analysis of approximately 2,000 Germans and was revised from a previous month’s -8.5 point, fell to -15.5, making it the lowest reading since February 2021.

Reuters polled analysts and found that they expected the index would fall to -14.0.

With the removal of all pandemic-related restrictions, there was still hope that consumer sentiment will recover in February. These hopes were crushed by the conflict in Ukraine,” Rolf Buerkl, GfK’s consumer expert, stated in a statement.

Buerkl stated that energy prices are most affected by rising uncertainty and sanctions towards Russia. He also said that a quick ceasefire, followed by negotiations, would be the best way to ensure longer-term consumer recovery in Germany.

He said that the domestic economy could then contribute significantly to economic growth again due to declining uncertainty and that the lifting of restrictions related to pandemics would be also able to have its beneficial effect.

After the invasion of Ukraine by Russian President Vladimir Putin on February 24, and the start to Europe’s largest conflict since World War Two, this survey was conducted from March 3 through March 14.

APR 2022, MAR 2022 APR 2030

Climate for consumers -15.5-8.5 -6.

Consumption climate components March 2022 FEB 2022 Mar 2021

Willingness to Buy -2.1.1.4 12.3

– income expectations -22.1 3.9 22.3

Business cycle forecasts -8.9 24.1 17.7

NOTICE: The survey period ran from March 3, 2022, to March 14, 2022.

The indicator of consumer climate forecasts real consumption growth over the coming month.

A reading of zero indicates a year-on-year increase in private consumption. Below zero means that the indicator is showing a decrease in consumption relative to the same time last year.

GfK says that a change of one point in the indicator equals 0.1% annual change in private consumption.

The indicator of “willingness” represents the mix between negative and positive responses to the question “Do you believe now is a good day to buy large-ticket items?”

The income expectations subindex represents household expectations regarding the future development of their finances over the next twelve months.

An additional index of business cycle expectancies reflects an assessment by those who were questioned about the economic outlook for the next twelve months.