In view of the war in Iran and its consequences for people’s wallets, the desire to buy in Germany continues to decline. According to the latest study by the NIM and GfK institutes, the consumer climate has recently fallen again. Income expectations have literally collapsed and are at their lowest level since February 2023.
According to the study published in Nuremberg on Monday, the current consumer climate indicator fell to minus 33.3 points, from a previously revised minus 28.1 points. Analysts had expected a weaker consumer mood, but had only assumed an average value of minus 30.0 points.
Willingness to spend on major purchases fell for the third year in a row and reached its lowest level in two years. Economic expectations fell to the same level as before the start of the war in Ukraine. However, the propensity to save also fell slightly.
Fear of inflation causes income expectations to collapse
“Income expectations are closely linked to the inflation expected by consumers,” says the analysis by the Nuremberg consumer researchers. “Income expectations are literally collapsing as a result of increased inflation. And against this background, people currently consider the time for larger purchases to be less favorable,” said NIM consumer expert Rolf Bürkl.
Consumers are increasingly concerned that the cautious upswing of the German economy could be seriously dampened – especially if the war in the Middle East continues and government measures have no effect.
“GfK consumer confidence follows the downward trend in the most important economic surveys,” wrote economist Claus Vistesen from Pantheon Economices. The rise in energy prices as a result of the war in Iran dealt a serious blow to the mood in the German economy.
For the monthly consumer climate study, 2,000 people are surveyed on behalf of the EU Commission. For the April study, the survey period was between April 2nd and 13th.