German consumer sentiment continues its gradual recovery in May, though the broader climate remains cautious amid persistent economic and geopolitical uncertainties. According to the latest GfK Consumer Climate powered by NIM study, conducted jointly by NielsenIQ (NIQ) and the Nuremberg Institute for Market Decisions (NIM), the consumer climate index is forecast to rise moderately by 0.9 points to -19.9 for June 2025. This marks the third consecutive monthly increase and the highest level since November 2024, when it stood at -18.4.
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Despite the slight upturn, key indicators show a mixed picture. While economic and income expectations are improving, consumers' willingness to buy has declined slightly, and the propensity to save has increased once again.
'The level of consumer sentiment remains extremely low, and consumer uncertainty remains high,' explains Rolf Bürkl, consumer expert at NIM. 'The unpredictable customs and trade policy of the US government, turbulence on the stock markets and fears of a third consecutive year of stagnation are reasons why the consumer climate remains weak. In view of the general economic situation, people seem to think it advisable to save.'
In line with this trend, the savings indicator rose by 1.6 points in May to 10.0, partially offsetting the positive impact of improved income and economic expectations.
Income expectations see noticeable lift
Income expectations improved for the third month in a row, gaining 6.1 points to reach 10.4—the highest since October 2024. Although this represents a 2.1-point decline year-on-year, recent wage increases and slowing inflation appear to be restoring some consumer confidence. Notably, the public sector recently secured wage settlements of +3% for 2025 and 2.8% for 2026.
The Federal Statistical Office reported a 2.1% inflation rate in April, slightly below the previous two months (2.2%), contributing to a modest boost in purchasing power.
Willingness to buy fails to follow income optimism
In contrast, the willingness to buy declined by 1.5 points to -6.4. Compared to the same month last year, however, the indicator is nearly 6 points higher. The disconnect between improved income sentiment and spending reluctance highlights lingering caution.
'Despite improved income prospects, willingness to buy is not increasing,' the report notes. 'Uncertainty caused by the US government's unpredictable customs and trade policy and a rise in unemployment, which is causing many employees to worry about their own jobs, is continuing. This is causing consumer restraint, even though income expectations are currently viewed more positively.'
Economic expectations reach two-year high
Optimism regarding Germany's economic future is growing, with the economic expectations indicator rising 5.9 points to 13.1—the highest in two years. However, caution tempers this optimism. The German Council of Economic Experts recently forecast no economic growth in 2025, with a modest rebound of 1% expected in 2026.
The GfK Consumer Climate powered by NIM study, based on approximately 2,000 interviews conducted from 1 to 12 May 2025, has been a key gauge of consumer behaviour since 1980. It reflects private consumer spending across various sectors, including retail, travel, housing, and healthcare.
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