Germans express a desire to increase their savings
German Consumers Hesitant as Saving Preferences Persist
German consumers continue to exhibit caution towards purchases, as the consumer climate remains weak, despite a marginal improvement over the past three months.
According to the latest study by market research firm GfK and the Nuremberg Institute for Market Decisions (NIM), the consumer climate index for June 2025 is projected to moderately increase by 0.9 points to -19.9 points compared to May. This hints at a slight recovery, but overall consumer sentiment remains bleak.
NIM consumer researcher Rolf Bürkl attributes this lingering uncertainty to the unpredictable trade and tariff policies of the U.S. government, market volatility, and concerns over a third consecutive year of economic stagnation. These factors are dampening consumer enthusiasm for spending, causing a preference for saving instead.
Experts, however, expressed caution regarding the modest improvement. Andreas Scheuerle of DekaBank notes that the consumer sentiment hasn't quite reached a level supportive of major consumption spikes yet. Alexander Krüger, chief economist of Hauck Aufhäuser Lampe Privatbank, pointed out that the future course would depend on evolving employment concerns. Nevertheless, a turnaround in the consumer climate is possible, though premature to declare.
As for the population's assessment of their financial situation, it has not been this favorable since October 2024. GfK attributes this improvement to good wage agreements and a slight easing of price increases, which boost purchasing power. However, despite this positive shift, consumers' readiness to make larger purchases has deteriorated.
The survey, comprising 2,000 consumer interviews, was commissioned by the EU Commission. The GfK Consumer Climate Index, a barometer of consumer sentiment in Germany, continues to reflect the cautious trend among consumers in 2025, indicating that while there is a slight improvement, consumer sentiment remains negative and savings remain a priority.
- Despite the slight improvement in the consumer climate, the finance sector may experience reduced demand as German consumers continue to prioritize savings over larger purchases, stemming from uncertainties in employment policy, trade policies, and economic stability.
- Businesses might need to re-evaluate their personal-finance strategies, given the persistent saving preferences and bleak consumer sentiment, as the ongoing unpredictability in employment and financial markets could further affect their long-term growth prospects.
