Germany’s GfK Consumer Climate for May fell sharply from -28.1 to -33.3, marking its lowest level since February 2023 and signaling further deterioration in household sentiment. The decline reflects mounting pressure on consumers as inflation expectations surge again, eroding purchasing power and confidence.
Underlying components point to broad-based weakness. Income expectations plunged from -6.3 to -24.4 in April, while willingness to buy slipped from -10.9 to -14.4. Although willingness to save eased slightly from 18.5 to 16.1, it remains elevated, suggesting households are still prioritizing precautionary behavior over consumption.
According to NIM’s Rolf Bürkl, income expectations are “literally collapsing” under the weight of rising inflation, leaving consumers increasingly reluctant to commit to major purchases.
The ongoing conflict involving Iran is weighing on economic expectations, with the outlook for Germany’s economy over the next 12 months deteriorating further from -6.9 to -13.7. The reading is now comparable to levels seen at the start of the Ukraine war in April 2022.
| Indicator | Previous | Latest | Change |
|---|---|---|---|
| GfK Consumer Climate (May) | -28.1 | -33.3 | ↓ -5.2 |
| Income Expectations (Apr) | -6.3 | -24.4 | ↓ -18.1 |
| Willingness to Buy (Apr) | -10.9 | -14.4 | ↓ -3.5 |
| Willingness to Save (Apr) | 18.5 | 16.1 | ↓ -2.4 |
| Economic Expectations (12m) | -6.9 | -13.7 | ↓ -6.8 |
