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Germany’s GfK consumer climate slips further in August

The survey showed income expectations falling and precautionary saving rising, while inflation worries increased after the fuel subsidy expired end-June.

Reported · Written up by our desk · Major Pairs

Germany’s GfK consumer climate fell slightly for August, edging down from -29.3 to -29.6, indicating household confidence remains deeply depressed despite some modest improvements in underlying components, Action Forex reports. The decline was driven by worsening income expectations, which dropped from -12.2 to -14.5, as well as a renewed rise in willingness to save, which increased from 13.9 to 17.0. While consumers became more willing to buy, that measure still stayed negative at -9.9 after improving from -13.4. The same survey also found economic expectations improving for a third consecutive month, rising from -8.7 to -6.3, suggesting pessimism about Germany’s economy is gradually easing. However, respondents still expect conditions to worsen over the next year. Inflation concerns ticked higher following the expiration of Germany’s fuel subsidy at the end of June, with the report noting higher pump prices reinforced consumer caution. Overall, Action Forex said the results point to a consumer sector that is still constrained, limiting prospects for a near-term boost to Germany’s recovery.

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