Consumer sentiment in Germany has continued to deteriorate in February, according to the GfK Consumer Climate Index, which was published on Wednesday.
Although consumer expectations of the economy have slightly increased, income expectations and the willingness to make purchases have suffered a second consecutive decline. Consequently, a decline of 2.1 points is forecast for March 2025 compared to the previous month, revised to -24.7 points.
In addition to the decline in income expectations and the willingness to make purchases, a rising savings rate also contributed to the decline in consumer climate: it increased by 1.2 points and rose to 9.4 points.
“The current numbers show no signs of a recovery in consumer sentiment in Germany” said Rolf Bürkl, a consumer expert at NIM, which is involved in the study. Since the middle of last year, the consumer climate has stagnated at a low level. “There is still a great deal of uncertainty among consumers and planning security is lacking.”
“A swift formation of a new federal government after the federal elections and a rapid passage of the budget for this year would provide both companies and private households with more planning security” the consumer expert said. “This would create important framework conditions, making consumers more willing to spend money and boost consumption.”
Consumers have a less favorable view of their household’s financial situation for the next 12 months for the second time in a row. The indicator loses 4.3 points compared to January and falls to -5.4 points. A lower value was last recorded in January 2024, when the income expectation was at -20 points. This sets the income indicator’s downward trend, which began in the middle of last year, in motion again in February.
The willingness to make purchases remained stuck in February, caught between declining income expectations and a rising savings rate. The indicator lost 2.7 points and currently stands at -11.1 points. The value was last worse in June 2024, when -13 points were recorded.
In contrast to income expectations and the willingness to make purchases, Germans currently have a slightly more positive view of the economic outlook for the next 12 months. The confidence indicator increased by 2.8 points and stands at 1.2 points.
The survey period for the current analysis was from January 30 to February 10. The results are based on around 2,000 consumer surveys, which are conducted monthly on behalf of the EU Commission.