German consumer confidence has taken a distinct downturn toward the year’s close, signaling a potentially challenging start to 2026. A newly released analysis from the GfK reveals a bleak outlook, with both income expectations and the willingness to purchase experiencing significant losses, exacerbated by a marked increase in the propensity to save. The consumer climate indicator is now projected to decline sharply, falling 3.5 points to -26.9 for January 2026 – a level not seen since April 2024.
The surge in saving inclination, reaching a 17-year high of 18.7 points, is a particularly concerning development. Rolf Bürkl, from the Nuremberg Institute for Market Decisions (NIM), noted that this figure surpasses even the levels seen during the 2008 financial crisis (21.4 points). This behavior suggests a growing sense of economic insecurity among German households.
Contributing factors to this heightened anxiety appear to be renewed inflationary concerns and the ongoing, contentious debates surrounding the future of Germany’s pension system. While the overall economic outlook remains relatively stable, with the cyclical expectation index demonstrating resilience and even edging upward to 1.2 points, the underlying shifts in consumer sentiment are troubling. Economists currently foresee a modest economic growth rate of just one percent for 2026.
The persistent downward trend in income expectations, now falling for the third consecutive period, further compounds the situation. The income indicator has sunk to -6.9 points, reflecting a growing perception that real wages and salaries are not keeping pace with inflation. This diminishes consumer purchasing power and contributes directly to the erosion of the willingness to buy. This disconnect between nominal and real income is proving crucial in understanding shifts in consumer behaviour.
The consequential decline in the willingness to purchase, losing 1.5 points despite previous gains, underscores the fragility of the German consumer market. The annual review for 2025 also reveals a decline of over two points in willingness to purchase compared to the previous year, suggesting a long-term weakening trend that demands closer political and economic scrutiny. The figures indicate more than just a short-term blip; they speak to a deeper-seated anxiety that potentially requires targeted intervention to bolster consumer confidence.