Improved Consumer Sentiment but Uncertainty Persists in Germany
Improved consumer sentiment persists, yet high levels of uncertainty continue to linger - Improvement in consumer sentiment persists, yet high levels of uncertainty linger
According to Rolf Bürkl, an expert from the Nuremberg Institute for Market Decisions (NIM), consumer sentiment in Germany continues to be low and uncertainty remains high, mainly due to unpredictable U.S. trade policies, stock market turbulence, and the ongoing economic sluggishness in the country.
Despite the ongoing pessimism, there are positive signs. The income expectations of those surveyed for the consumer climate increased significantly by 6.1 points to reach 10.4 points, marking the highest value since October 2024. Furthermore, economic expectations rose by 5.9 points to 13.1 points, marking the fourth consecutive increase and the highest value in over two years.
However, the willingness to make purchases decreased, dropping by 1.5 points to -6.4 points. Bürkl explains that consumers appear to be prioritizing saving amidst the uncertain economic situation. As a result, the propensity to save increased by 1.6 points to 10.0 points.
GfK and NIM interviewed around 2,000 consumers from April 3 to 14 to determine the consumer climate, which includes private consumption expenditure on retail, services, travel, rent, and healthcare services.
Although consumer sentiment has shown a slight improvement ahead of June 2025, the overall Consumer Climate index is projected to rise modestly to -19.9 points. This marks the third consecutive monthly increase and the highest level since November 2024. Despite these tentative improvements, caution prevails, with increased saving behavior and reduced purchase readiness, keeping the consumer climate fragile and subdued.
The continued improvement in consumer sentiment in Germany, as indicated by the increased income expectations and economic expectations, may offer some positivity for the EC countries' employment policy, particularly in the business sector. However, the reduced willingness to make purchases and increased propensity to save suggest that uncertainty persists, which might affect the job market and corporate finance, especially in the retail and service industries.
