According to GfK and the NIM Institute, researchers believe that the slump in German consumer sentiment has been temporarily halted, as the corresponding indicator is not declining further this month and is even recovering moderately.
Specifically, consumer income expectations have shown a noticeable recovery this month, rising to -13.0 points. This represents a significant increase of 11.4 points compared to the previous month. Experts suggest that partly due to the ongoing lack of escalation in the Middle East, some of the geopolitical uncertainty has been incorporated into consumer expectations. Additionally, political signals hinting at potential relief measures are thought to have brightened the income expectations of private households, although the overall indicator remains clearly pessimistic compared to pre-crisis levels.
Consumer willingness to purchase has improved by 1.2 points from the last month, now standing at -13.2 points. As this indicator has long been in negative territory, it continues to signal that consumers do not currently view making major purchases favorably.
Meanwhile, the propensity to save-which indicates whether people currently deem saving advisable given the general economic situation-has continued to decline. After dropping by 2.2 points, this indicator now stands at 13.9 points, marking the third consecutive decrease. While this figure remains high in the long term, it is marginally lower than it was earlier this year.
Consumer economic outlooks improved slightly this month by 2.5 points, reaching -11.2 points. Despite this positive shift, the majority of consumers still anticipate a worsening economic situation over the next twelve months. However, given the recent multiple downward revisions to growth forecasts, the recovery in economic outlook is considered a positive sign, likely influenced by the increased income expectations.
The public’s view on rising prices in the next 12 months has also seen a decrease, though it is still expected to rise. The indicator fell by 5.4 points compared to the previous month, reaching -0.4 points. This decline is reportedly linked to the reduction of energy taxes on diesel and gasoline, which consumers registered strongly.
