Germany’s GfK consumer sentiment index for April posted a modest improvement for the sixth consecutive month, rising from -30.6 to -29.5, although it fell short of the expected -29.0. In March, economic expectations for dipped from 6.0 to 3.7, while income expectations increased from -27.3 to -24.3. Propensity to buy also saw a slight uptick from -17.3 to -17.0.
GfK consumer expert Rolf Bürkl attributes the improved income expectations to the recent decline in energy prices, particularly for gas and heating oil. However, Bürkl cautions that inflation will remain elevated this year, albeit lower than the 6.9% recorded in 2022.
He explains, “The expected loss of purchasing power is preventing a sustained recovery in domestic demand. Accordingly, private consumption is unlikely to make a positive contribution to economic growth in Germany this year.” This outlook is reinforced by the persistently low level of consumer sentiment.
