The survey results published by GfK Group and the Nuremberg Institute for Market Decisions (NIM) showed that the forecast consumer sentiment index for July fell to -21.8 points from -21.0 points in June (revised from -20.9 points). However, the index remains near its highest level since April 2022. Economists had expected an increase to -18.9 points.
"The slightly higher inflation rate in Germany in May obviously causes uncertainty among consumers again, which is also reflected in the growing willingness to save. For a sustained recovery in consumer sentiment, consumers, in addition to the existing growth in real incomes, need to ensure the safety of planning, which is especially necessary for large purchases by households. And this security will only return if the upward pressure on prices is further dampened and if consumers are shown clear future prospects", - said Rolf Bürkl, consumer expert at NIM.
GfK said that in June, the willingness to save component increased by 3.2 points to 8.2 points. Meanwhile, the income expectations component fell by 4.3 points to 8.2 points. This was the first decrease in the last 5 months. The main reason for the moderate decline in income expectations is likely to be the rise in the inflation rate. However, in comparison to the same period last year, the index rose by almost 19 points. The willingness to buy component fell by 0.7 points to -13.0 points. The indicator has remained at an extremely low level for more than two years now. Meanwhile, the economic expectations indicator decreased by 7.3 points, to 2.5 points. Despite the decline in June, it can be assumed that the economic recovery in Germany is likely to continue in the second half of the year.