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Germany’s consumer climate wavers as caution rises amid optimism

Consumer confidence in Germany showed mixed signals in June, with the latest GfK Consumer Climate powered by NIM survey reporting a slight decline of 0.3 points in the headline indicator to -20.3 points for July 2025. While economic and income expectations continue to climb, a growing willingness to save is holding back further recovery in sentiment.

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'After three consecutive increases, the consumer climate has thus suffered a slight setback,' said Rolf Bürkl, consumer expert at NIM. 'This is primarily due to the increased willingness to save, which is currently counteracting the positive impetus provided by improved income prospects. A high willingness to save among consumers is also an expression of their continuing uncertainty and thus a lack of planning security. The latter is particularly important for consumers when it comes to larger purchases or expenses. That is why the willingness to buy also suffers slight losses this month.'

The savings indicator rose by 3.9 points to 13.9 – its highest level in over a year. Simultaneously, income expectations advanced for the fourth consecutive month, increasing by 2.4 points to reach 12.8. This growth is buoyed by favourable wage agreements, such as those in the public sector, and moderate inflation, resulting in tangible gains in purchasing power. Pensioners are also set to benefit from a 3.74 percent increase in statutory pension payments effective 1 July 2025.

However, willingness to buy remains subdued, rising by only 0.2 points to -6.2. Despite improved income outlooks, consumers appear hesitant, with global uncertainties weighing on sentiment. The report notes that 'uncertainty caused by the US government's continuing unpredictable policies, particularly on customs and trade issues, is causing German consumers to remain cautious and adopt a wait-and-see attitude.'

In contrast, economic expectations climbed strongly, up seven points to 20.1 – their highest level since February 2022. Consumers appear increasingly hopeful that economic activity will improve over the second half of the year, spurred by defence and infrastructure stimulus packages. Forecasts suggest GDP growth of around 0.3 percent in 2025.

The GfK Consumer Climate powered by NIM report, based on 2,000 monthly interviews, has been a vital barometer of German consumer behaviour since 1974. It is jointly published by GfK and the Nuremberg Institute for Market Decisions (NIM), combining analytical expertise and behavioural insight.

More information:
Nielsen IQ
www.nielseniq.com

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