German consumer morale falls further as lockdown pushes up savings rate

BERLIN, Dec 22 (Reuters) - German consumer morale fell a third month in a row heading into January as a stricter lockdown to contain a surge in coronavirus infections reduced income expectations and increased the propensity to save, a survey showed on Tuesday. The GfK research institute said its consumer sentiment index, based on a survey of around 2,000 Germans, fell to -7.3 points from a revised -6.8 in the previous month. This marked the lowest reading since July and came in slightly better than a Reuters forecast of -8.8. Chancellor Angela Merkel and state leaders imposed a "lockdown lite" from Nov. 2, under which restaurants, bars and entertainment venues were closed while shops remained open. As the measures failed to push down infection numbers, the government put in place stricter curbs from Dec. 16 which have shuttered most stores as well hair salons and other services. "At present, the savings indicator is the main factor driving the third decline in a row in the consumer climate," GfK researcher Rolf Buerkl said. The survey chimes with data that showed a temporary reduction in sales tax, put in place by the government to stimulate domestic demand, has failed to turn anxious savers into big spenders. As long as new COVID-19 cases remain high there is no improvement in sight which means any recovery can only be expected when infections drop so far that curbs can be loosened again, Buerkl said. Senior government officials have said they expect the stricter lockdown measures, so far announced until at least Jan. 10, to be extended well into the new year. Jan 2021 Dec 2020 Jan 2020 Consumer climate -7.3 -6.8 9.7 Consumer climate components Dec 2020 Nov 2020 Dec 2019 - willingness to buy 36.6 30.5 52.2 - income expectations 3.6 4.6 35.0 - business cycle expectations 4.4 -0.2 -4.4 NOTE - The survey period was from Nov. 5 to Nov. 16, 2020. 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 Michael Nienaber; Editing by Maria Sheahan)