Struggling Consumers Disenchanted by Shopping
In July 2025, consumer sentiment in Germany showed no signs of recovery, despite a significant improvement in income expectations. The consumer confidence index dropped to -20.3, according to a survey conducted by GfK and the Nuremberg Institute for Market Decisions (NIM).
The survey, which was carried out between July 3 and 14, 2025, revealed that the propensity to save among German consumers has reached its highest level since February 2024, standing at 16.4 points—an increase of 2.5 points from the previous month. This high propensity to save indicates a cautious approach to spending due to economic uncertainty and high prices.
The survey results suggest a continued struggle for consumer sentiment in Germany, even during the summer months. The improved income expectations, primarily driven by public sector wage increases and moderate inflation, have not been enough to boost the willingness to purchase goods and services. The buying propensity indicator stood at -6.2 in June.
The factors contributing to the high propensity to save among German consumers include lingering economic uncertainties, recent European Central Bank (ECB) interest rate cuts, historical and cultural tendencies towards conservative financial management, and moderate but still noticeable inflation.
The economic uncertainties have made households prioritise financial security over discretionary spending, while the ECB's interest rate cuts, although intended to stimulate spending, have instead influenced cautious financial behaviour. Germany's historical and cultural tendencies towards high savings rates during uncertain times have also played a role.
Moreover, the moderate but still noticeable inflation, although stable, has made consumers careful about spending increases. The high prices, especially for food, have also led many consumers to postpone major purchases in favour of financial security.
Despite consumers' expectations of improved purchasing power, aided by solid wage agreements, pension increases, and a recent drop in inflation to two percent, Rolf Bürkl, a consumer expert at NIM, stated that the recovery in consumer sentiment is still pending due to the increased propensity to save. The indicator for economic recovery hopes this year has been dampened as a result.
[1] GfK and Nuremberg Institute for Market Decisions (NIM) survey, July 2025. [2] EU Commission-commissioned consumer interviews, approximately 2,000 per month. [3] Historical and cultural tendencies towards conservative financial management and high savings rates in Germany. (Sources: 2 and 3 are not directly cited in the bullet points but are inferred from the information provided.)
Personal finance remains a concern for many Germans, with the propensity to save reaching its highest level since February 2024. budgeting and saving become essential strategies for households due to economic uncertainties, high prices, and moderate inflation. Despite improved income expectations, the willingness to purchase goods and services has not significantly increased, indicating a continued struggle for consumer sentiment in Germany.
