By Andrea Thomas
DOW JONES–Consumer sentiment in Germany deteriorated noticeably after the turn of the year and fell to its lowest level since February 2024. The current consumption barometer from the German Trade Association (HDE) falls to 94.99 after 97.54 in December. This means that the slight recovery in consumer sentiment from the previous year has almost completely disappeared.
“There is hope for an economic recovery in the new year 2025. However, consumers in Germany assume that the hoped-for turnaround will be delayed,” explained the association. The HDE consumption barometer is starting the new year in a similarly subdued manner as in the previous year.
The renewed increase in consumer reluctance shows that uncertainty is growing among consumers. According to HDE, the propensity to buy is decreasing compared to the previous month and there are signs of a shift from consuming to saving in the coming months. According to HDE, consumers plan to save more and build up a financial cushion. “With regard to private consumption, no major growth is in sight,” said the HDE.
Consumers’ economic expectations have also deteriorated somewhat compared to the previous month. However, they were more optimistic about further overall economic development than a year ago. According to the association, consumers also seem to be assuming that an economic recovery will take some time to come, even in view of the upcoming federal election.
Their own income expectations are significantly more pessimistic than in the previous month. Consumers do not expect their disposable income to increase noticeably in the coming weeks. According to the association, the background is likely to be, among other things, the continued tense situation on the labor market.
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DJG/aat/apo
(END) Dow Jones Newswires
January 13, 2025 03:00 ET (08:00 GMT)