Germany’s consumer confidence, which has been under pressure for months, appears to be stabilizing slightly towards the year’s close, according to a new analysis released Thursday by the GfK. However, the improvement is marked by a lack of uniformity across various key indicators, highlighting the persistent anxieties underpinning household sentiment.
While the “propensity to purchase” has enjoyed a second consecutive increase and the “willingness to save” has retreated, expectations regarding both the broader economy and household income have suffered setbacks. The consumer climate indicator is projected to rise marginally by 0.9 points month-on-month to -23.2 points in December. This modest uptick represents a near-identical performance compared to the same period last year, a finding Rolf Bürkl of the Nuremberg Institute for Market Decisions (NIM) described as positive news for the retail sector, hinting at a stable holiday shopping season mirroring last year’s performance.
However, this sense of cautious optimism is tempered by a concerning decline in expectations regarding future household income. Following the second consecutive decrease, the indicator registered a loss of -2.4 points in November, a significant improvement compared to the sharp drop observed in October, when the indicator plummeted nearly 13 points. Currently, the income expectations indicator stands at a low -0.1 points, a level not seen in eight months. This suggests persistent fears about economic pressures impacting personal finances remain a significant factor.
The renewed increase in the propensity to purchase, gaining 3.3 points to reach -6.0, is a welcome development, returning to the levels seen in November 2024 and marking the second-highest value of the year, only surpassed by April 2025. However, this positive movement is not enough to fully offset the anxieties surrounding income and the overall economic outlook.
German consumers remain hesitant in their assessment of the economic outlook for the next 12 months. The relevant indicator has marginally declined by 1.9 points, falling to -1.1 points. While this remains slightly above the levels recorded in the same period last year (+2.5 points), it underscores a prevailing belief that a substantial economic recovery is not on the horizon, potentially dampening broader economic growth and hindering government efforts to stimulate demand. The data paints a complex picture of stabilization underpinned by enduring anxieties, leaving policymakers facing a delicate balancing act between celebrating a fragile recovery and addressing the concerns that continue to restrain consumer spending.