German consumer confidence improves but remains low

Consumer confidence in Germany increased more than expected as income expectations and willingness to buy both improved.

The forward-looking consumer confidence index from GfK and the Nuremberg Institute for Market Decisions (NIM) increased to -21.3 in January, up from a revised -23.1 the month before.

While this was above the consensus forecast of -22.5, the consumer climate "remains at a very low level", according to Rolf Bürkl, consumer expert at NIM.

"Looking back, we have just seen stagnation since mid-2024. A sustained recovery in consumer sentiment is not yet in sight, as consumer uncertainty is still too high. The main reason is high food and energy prices. In addition, concerns about job security are growing in many sectors.”

The sub-index for consumers' economic expectations rose 3.9 points to 0.3, offsetting losses recorded the previous month to stand at roughly the same level as last year.

Income expectations partially recovered by 4.9 points to 1.4, but only partially offset the 17-point drop in November, while the willingness to buy indicator edged 0.6 points higher to -5.4.