The survey results published by GfK Group and the Nuremberg Institute for Market Decisions (NIM) showed that the forecast consumer sentiment index for July fell to -20.3 points from -20.0 points in June (revised from -19.9 points). This was the first decrease in the last 4 months. Economists had expected growth to be -19.3 points.
"The consumer climate has suffered a slight setback. This is primarily due to the increased willingness to save, which is currently counteracting the positive impetus provided by improved income prospects. A high willingness to save among consumers is also an expression of their continuing uncertainty and thus a lack of planning security. The latter is particularly important for consumers when it comes to larger purchases or expenses. That is why the willingness to buy also suffers slight losses this month,“ said Rolf Bürkl, consumer expert at NIM.
GfK said that in June, the willingness to save component increased by 3.9 points to 13.9 points (the highest value in more than a year). Meanwhile, the income expectations component increased by 2.4 points to 12.8 points. The optimistic outlook for financial income is primarily based on the recent favorable wage agreements, for example in the public sector, combined with a moderate inflation rate. The willingness to buy component increased by 0.2 points to -6.2 points. This means that willingness to buy has failed to benefit from the significant rise in income expectations for the second month in a row. Meanwhile, the economic expectations indicator rose by 7.0 points to 20.1 points. This is the highest value since the outbreak of the war in Ukraine (in February 2022, the index was 24.1 points). Many consumers apparently assume that the economy will recover in the course of 2025. This optimism is supported by the recently published economic forecasts of the most important German economic research institutes.