Enhanced Consumer Optimism Persists - Elevated Uncertainty prevails - Improvement in consumer sentiment persists, yet high levels of uncertainty prevail
Consumer Sentiment in Germany Shows Moderate Improvement Amid High Uncertainty
NUREMBERG, Germany — Consumer sentiment in Germany remains low and uncertainty remains high, according to Rolf Bürkl, a consumer expert from the Nuremberg Institute for Market Decisions (NIM). This is largely due to the unpredictable trade policies of the US government, turmoil on the stock markets, and the persistent weakness of the German economy.
Despite these challenges, there has been a slight improvement recently. Income expectations of those surveyed for the consumer climate rose significantly, with a 6.1 point increase to 10.4 points. This is the highest value since October 2024. The economic expectations index also climbed by 5.9 points to 13.1 points, marking the fourth consecutive increase and the highest value in over two years.
However, the propensity to make purchases decreased. This indicator was 1.5 points lower than the previous month at minus 6.4 points. "People apparently consider it prudent to save in view of the current economic situation," explained Bürkl. The propensity to save rose by 1.6 points to 10.0 points.
GfK and NIM conduct monthly interviews with consumers, with around 2,000 people interviewed from 3 to 14 April. The consumer climate refers to total private consumption expenditure, including retail, services, travel, rent, and healthcare services.
Although sentiment has improved slightly, it remains deeply negative. GfK projects the Consumer Climate index to rise to -19.9 in June 2025, up from a revised -20.8 in May, marking the third consecutive monthly increase and the highest level since November 2024.
The unpredictable customs and trade policies of the US, volatile stock markets, and fears of a third consecutive year of economic stagnation have contributed to this cautious outlook. While economic and income expectations have improved, household spending remains weak, with consumers prioritizing financial security over consumption.
[1] German Council of Economic Experts forecasts no growth for 2025, with only a modest rebound (1%) expected in 2026.[2] Source for Consumer Climate index projection unavailable.[3] Data from GfK and NIM consumer surveys.[4] Data pertaining to stock market volatility not provided.
EC countries could face challenges in business growth due to the high uncertainty caused by the unpredictable finance policies of the US government, as the volatile trade relations and instability in stock markets affect consumer sentiment, such as in Germany. Despite a slight improvement in employment policy, as indicated by the increase in income and economic expectations, the employment policy remains negative, with people prioritizing saving over consumption, possibly due to fears of economic stagnation.
