German consumer sentiment sees modest recovery for ’25

German consumer sentiment improved slightly heading into 2025, with the GfK Consumer Climate indicator rising to -21.3 points for January, up 1.8 points from the revised -23.1 for December.

The recovery is driven by gains in income expectations and a declining willingness to save, though the overall climate remains weak.

Income expectations rose by 4.9 points in December, recovering from November’s sharp decline, while willingness to buy gained 0.6 points, reaching -5.4 points. However, high food and energy prices, along with growing job security concerns, continue to weigh on sentiment.

Economic expectations stabilised at 0.3 points after four months of decline but remained subdued amid downgraded growth forecasts. Economic experts predict minimal growth for 2025, following a flat performance in 2024.

According to the Nuremberg Institute for Market Decisions (NIM), the improvement in consumer sentiment only partially offsets earlier declines, as uncertainty and cost pressures continue to limit recovery prospects.

Attribution: NIM

Subediting: M. S. Salama