Consumer sentiment in Germany is based on the gloomy winter weather: According to the latest study by the consumer research institutes GfK and NIM presented on Wednesday, there is currently no improvement in sight. Income expectations were slightly higher in February than in the previous month. However, the propensity to buy has continued to deteriorate. The already high propensity to save has also increased again – and is currently at its highest level since the 2008 financial crisis.
Saving instead of consuming
“With the slight decline to -24.7 points, the consumer climate cannot continue the improvement last month,” said NIM consumer expert Rolf Bürkl. “There is still a tendency for people to save rather than consume as incomes rise due to precautionary tendencies,” explained Bürkl. Analysts on average had expected a slight improvement in the consumer climate.
Geopolitics and social affairs
Although the economy appears to be recovering slightly, consumers remain skeptical. “The geopolitical tensions, but also the challenges in social policy, are likely to keep uncertainty and thus the propensity to save high,” said Bürkl. Rising prices – the inflation rate rose again to 2.1 percent in January – are also a reason for many consumers to hold on to their money for the time being. There are no expectations of any price reductions in the near future.
On behalf of the EU Commission, the institutes survey around 2,000 consumers every month about their expectations and behavior. For the current study, consumers were interviewed between January 29th and February 9th.
