Consumer sentiment in Germany remains stable but at a low level. The GfK and the NIM Institute published the November Consumer Climate Index on Wednesday morning, registering at -30.8 points-a slight decrease of 0.2 points compared to the previous month. This figure remains significantly lower than last year’s level, which stood at -22.5 points.
The various indicators present a mixed picture. While the expectation of economic growth has risen for the sixth consecutive month and the propensity to save has decreased moderately, the inclination to purchase continues to decline slightly.
Income expectations have also cooled off somewhat again. Although they dropped sharply last month, this month they only decreased slightly, despite the rising inflation rate. The indicator lost 0.7 points and fell to -15.7 points. Following the introduction of the fuel discount in May, which recovered roughly half of the April drop, a comparable positive movement has not yet materialized this month; despite the reintroduction of the fuel discount, only stabilization so far is noted regarding income expectations following the dramatic downturn last month.
The propensity to save, which had risen sharply last month, did not increase further this month, falling by 4.3 points to 17.2 points. Although it remains relatively high, this slight decline helps support the overall consumer climate.
The propensity to buy has not benefited from the moderating saving habit; it is currently declining further, albeit marginally. The indicator lost slightly over one point, now standing at 11.9 points. Consumers’ price expectations are also playing a role here. The price indicator has increased and is currently positive, suggesting that consumers expect slightly higher inflation. The inflation rate rose to 3.3 percent in September, spurred by higher fuel prices, marking the highest rate since December 2023.
Conversely, consumers’ economic expectations have brightened for the sixth consecutive time. The index reached 2.1 points, crossing above the zero line for the first time since the Iraq war began, signaling that consumers are increasingly optimistic about Germany’s future economic trajectory.
However, Rolf Bürkl from the NIM notes that despite growing optimism about the economy, skepticism continues to prevail when looking at one’s own wallet. Rising inflation concerns and subdued income prospects are delaying the willingness to make major purchases, even if the propensity to save is starting to drop. He adds that the fuel discount does not appear to be providing the hoped-for relief. While there is hope for an economic upswing, the willingness to spend more has yet to follow suit.
