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German Consumer Pessimism Deepens as Eurozone Inflation Falls Below ECB Target

Following interest-rate cuts by the European Central Bank, soaring food costs in essentials have deepened economic anxiety among the most vulnerable households.

Menschen in Berlin Charlottenburg
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Overview

  • Sixty-two percent of German consumers now assess their economic situation negatively, up ten percentage points from last year.
  • Eurozone inflation slipped to 1.9 percent in May, marking the first time it has fallen below the ECB’s 2.0 percent target since September.
  • The ECB has lowered its key interest rates eight times since mid-2024, bringing the deposit rate down to 2.0 percent.
  • Coffee and beef prices have jumped 43.3 percent and 30.4 percent year-on-year, prompting 60 to 75 percent of shoppers to seek cheaper brands.
  • Energy costs have eased with electricity down 7.5 percent and gas 6.2 percent, but seniors and low-income households remain hardest hit by food inflation.