Germany’s GfK Consumer Sentiment index for June improved significantly, rising from -24.0 to -20.9 and surpassing expectations of -22.5. This marks the fourth consecutive month of improved sentiment.
In May, economic expectations jumped from 0.7 to 9.8, while income expectations rose from 10.7 to 12.5, the highest level since January 2022. Willingness to buy edged up slightly from -12.6 to -12.3, and willingness to save dropped sharply from 14.9 to 5.0, the lowest value since August 2023.
Rolf Bürkl, consumer expert at NIM, explained that “falling inflation rates combined with considerable wage and salary increases strengthen consumer purchasing power. This stimulates income expectations and also reduces consumer uncertainty, which was responsible for the comparatively high willingness to save in previous months.”
Despite these positive trends, Bürkl noted that uncertainty still lingers among German consumers. This is attributed to the lack of clear future prospects in the country, which undermines planning certainty for significant purchases. “People will have to regain this certainty before they are willing to invest their growing purchasing power in larger purchases,” he added.
