One cause could be a time lag of the effects of the VAT increase. For example if shopkeepers who had not adjusted their prices in accordance with the new VAT rate in January, did so as yet in February. Another possibility is a delay of the knock-on effect of the strong increases in energy costs in prices of consumer goods. It is now just as low as at the end of 1998, the low point in the Asian crisis. The decline is caused entirely by a more pessimistic view on the economic climate.
Consumers view future economic developments in particular less favourably.
Willingness to buy has been stable in the first three months of 2001, but at a lower level than in 2000. The number of households who think now is the right time to buy large durable items has risen slightly in March. On the other hand, consumers have become slightly less optimistic about their own financial situation in the coming twelve months. In February and March the number of consumers who expect an improvement in their financial situation has been smaller than in the preceding months. The group that expects a deterioration, on the other hand, has become larger.