The GfK Consumer Climate Indicator for Germany dropped to -22.4 in early February 2025, down from a slightly revised -21.3 in the previous month, falling short of market expectations of -20.
German consumer morale below forecasts
The decline was driven by weaker readings across all major components. Economic prospects turned negative (-1.6 compared to +0.3 in January), income expectations also dropped sharply (-1.1 versus +1.4), and the willingness to buy worsened significantly (-8.4 versus -5.4), all reflecting a sluggish economic recovery, rising layoffs, and factory closures. This suggests that German consumers remain cautious due to ongoing economic uncertainty.
At the same time, the propensity to save increased notably (8.2 compared to 5.9), as consumers opted to tighten their belts in preparation for the upcoming elections next month.
Growing concerns over economic stability
Experts have highlighted the growing concerns over the Nation's economic stability, with inflation rising again, dampening sentiment further. "The consumer climate has suffered another setback," commented Rolf Bürkl, a consumer expert at NIM, who stressed that a sustainable recovery remains elusive, particularly with inflationary pressures continuing to weigh on household budgets and dampen consumer confidence.
