The indicator had reached its previous low in September.
Almost four out of ten consumers (38%) this month estimate that their financial situation has deteriorated over the past year. Conversely, only 16 percent estimate that their financial situation has improved since December 2021.
Research data also shows that consumers are unprecedentedly cautious when buying durable goods and taking out a loan, whether it’s a car or an apartment.
Pertti Kangassalosenior statistician from Statistics Finland, told YLE reported on Tuesday that the reasons are obvious: the energy crisis, rapid inflation and rising interest rates have together weakened consumer confidence.
Kangassalo, who has followed the country’s consumer sentiment for a quarter of a century, admitted that he was surprised by the extent of consumer pessimism. – It’s been a long time since I was surprised by anything, he commented to the public broadcasting company. “This is the first time in the history of this study that consumers seem to be exaggerating the course of economic development.”
One of his main points is that young people are also pessimistic about the economy by nature.
“Young people have always had a more optimistic view of themselves and the Finnish economy than their parents. Right now, the causes of economic uncertainty, such as price increases, are so tangible that they also affect young people quite a bit,” he analyzed.
Terhi-Anna WilskaA professor of sociology who focused on consumption at the University of Jyväskylä saw that the weakening of consumer confidence is partly due to media reporting.
“They have made a media circus out of electricity prices and electricity subsidies. And I’m not saying that the situation isn’t difficult, but there has also been an overreaction,” he commented to YLE. “The doom and gloom of the media is really grim – what can happen in the worst case scenario. Many may think that electricity prices just go up and up and interest rates just go up and up.
He pointed out that consumers who do not have mortgage obligations and who have not been seriously affected by the rise in electricity prices are also cutting their consumption. “However, as long as people have jobs, the situation is by no means hopeless,” Wilska reminded.
At the same time, Kangassalo paid attention to consumers’ views on their own employment prospects. “In terms of unemployment or employment, according to Finns’ assessment, there is nothing too dramatic on the horizon,” he summed up.
The Finnish Confederation of Business and Industry EK on Tuesday reported that the erosion of business confidence stopped in December.
Sami PakarinenEK’s director general said that the development is due to growing confidence in the service sector. “Water for production, while there was some decrease in construction. The biggest drop was in retail, he said.
Aleksi Teivainen – HT
Source: The Nordic Page