The survey results published by GfK Group and the Nuremberg Institute for Market Decisions (NIM) showed that the forecast consumer sentiment index for June rose to -20.9 points from -24.0 points in May (revised from -24.2 points). Economists had expected an increase to -22.5 points. The May value was the highest since April 2022.
“Lower inflation combined with significant wage growth strengthens consumers' purchasing power. This stimulates income expectations, as well as reduces consumer uncertainty, which was the reason for the relatively high willingness to save in previous months. Nevertheless, there is still uncertainty among German consumers. This can be explained by the lack of clear prospects for the future in the country, which undermines confidence in planning when shopping," said Rolf Bürkl, consumer expert at NIM.
GfK said that in May, the willingness to save component fell by 9.9 points to 5.0 points (the lowest value since August 2023, when it was 0.5 points). Meanwhile, the income expectations component increased by 1.8 points to 12.5 points. However, growth has slowed compared to the previous three months. In comparison to the same period last year, the increase is more than 20 points. The growth of this indicator was caused by a significant increase in wages and state pensions, as well as a decrease in inflation. The willingness to buy component increased by 0.3 points to -12.3 points. However, it continues to be at an extremely low level. This index has been stuck in a low -20 to -10 point range for more than two years and shows no signs of recovery. Meanwhile, the economic expectations indicator rose by 9.1 points, to 9.8 points.