Germany Gfk Consumer Climate Improves Slightly as Inflation Fears Recede

Germany’s GfK Consumer Climate improved modestly heading into July, with the headline index rising from a revised -29.7 to -29.2, but missed expectation of -28.0. The improvement was driven mainly by a slight recovery in income expectations, while willingness to buy remained deeply negative and households continued to favor saving over spending. The latest survey indicates that consumers remain cautious despite signs that the broader economic outlook is becoming less pessimistic.

Income expectations rose 0.8 points to -12.2 after last month’s sharp rebound, although they remain well below pre-Iran conflict levels. Economic expectations also improved, with the indicator climbing 2.5 points to -8.7 as consumers became somewhat less pessimistic about Germany’s economic prospects over the coming year. Meanwhile, inflation concerns continued to ease for a second consecutive month, with price expectations falling 2.5 points to -2.9.

NIM’s Head of Consumer Climate, Rolf Bürkl, said, “Consumer Climate is currently stabilizing at a low level,” noting that “there are no signs yet of a return toward pre-war levels,” even though easing geopolitical tensions and lower oil prices are helping to improve inflation expectations and the broader economic outlook.

Full German Gfk consumer climate release here.