German GfK Consumer Sentiment To Improve In June
May 28 2024 - 11:26PM
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Consumer confidence in Germany is set to improve further in June
on rising economic and income expectations amid slowing inflation
and rising wages, results of a survey showed Wednesday.
The consumer confidence index rose to -20.9 in June from a
revised -24.0 in the previous month, the survey published jointly
by GfK and the Nuremberg Institute for Market Decisions showed
Wednesday.
Overall consumer climate improved for the fourth time in a
row.
Rolf Burkl, consumer expert at NIM said falling inflation rates
combined with significant wage and salary increases strengthen
consumer purchasing power.
This stimulates income expectations and also reduces consumer
uncertainty, which was responsible for the comparatively high
willingness to save in previous months, said Burkl.
There was a significant decline in the propensity to save in
May. The corresponding index declined sharply by about 10 points to
5.0, the lowest value since August 2023.
Economic expectations among households increased for the fourth
straight month in May. The index climbed 9.1 points to 9.8 in May.
At the same time, the income expectations index rose 1.8 points to
12.5 in May. The reading reached its highest since January 2022.
The improvement was underpinned by rising wages and salaries amid
falling inflation. The real income growth strengthened households'
purchasing power.
Nonetheless, the propensity to buy failed to gain any benefit
from the increasing economic and income expectations. The index
rose only 0.3 points to hit -12.3 in May.
Higher prices for food and energy as well as the ongoing
uncertainty forced households to set aside financial resources for
future rather than spending, GfK said.
"There still seems to be uncertainty among German consumers,"
Burkl said.
"This can be attributed to the lack of clear future prospects in
the country, which undermines planning certainty when making
purchases. People will have to regain this certainty before they
are willing to invest their growing purchasing power in larger
purchases."
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