German consumer sentiment set to stabilise - GfK

German consumer sentiment is expected to stabilise in August amid hopes of a decline in inflation, according to a survey released on Thursday by market research group GfK.

GfK’s forward-looking consumer sentiment index for next month rose to -24.4 from a revised -25.2 in July. This was ahead of expectations for a reading of -24.7.

Rolf Bürkl, GfK consumer expert, said: "Currently, only income expectations are contributing to the improvement in consumer sentiment. The main reason for the decrease in pessimism is the hope of declining inflation rates.

"This has somewhat improved the chances of consumer sentiment resuming its recovery course. However, the level will still remain low in the coming months, and private consumption will therefore not be able to make a positive contribution to overall economic development."

The survey showed that income expectations were at their highest level since February 2022, with the index up 5.5 points to -5.1 in July. GfK pointed out that this is the best level since the outbreak of the war in Ukraine.

Meanwhile, the index for the propensity to buy ticked up just 0.3 points to -14.3.