BERLIN, March 26 (Xinhua) -- Escalating tensions in the Middle East are weighing on German consumer sentiment, as households grow more cautious about the economic outlook amid rising uncertainty and higher energy costs, a monthly survey showed Thursday.
The GfK consumer climate index, a forward-looking indicator of private consumption, is forecast to drop by 3.2 points to minus 28 for April. The deterioration reflects the ongoing U.S.-Israeli attacks on Iran, which add fresh pressure to Europe's largest economy after three years of recession or stagnation, according to the survey.
Among the index's components, income expectations and assessments of the economic outlook over the next 12 months decline markedly, the survey showed. GfK said rising energy prices are adding to cost pressures and weighing on sentiment.
"Consumers expect inflation to pick up again due to rising energy prices, and that the economic recovery will once more be held back," said Rolf Buerkl, head of consumer climate at GfK.
Citing a separate GfK study, Buerkl said around 60 percent of Germans expect prices for oil, gas and petrol to remain persistently elevated, a factor likely to further weigh on sentiment.
He added that more than 90 percent of respondents who expect a significant deterioration in their income situation also believe the world will become more uncertain in the coming years as a result of the latest Middle East conflict.
Meanwhile, the conflict is feeding through to the corporate sector. Data released on Wednesday by the ifo Institute showed German business confidence fell in March, with the climate index dropping to 86.4 from 88.4, as higher energy costs hit sentiment, particularly in manufacturing, tourism and logistics. ■
