German consumer confidence is set to experience a modest recovery in October, even as the broader economic outlook remains subdued. This is according to survey data recently released by GfK and the Nuremberg Institute for Market Decisions.
The forward-looking consumer sentiment index edged up to -21.2 in October from -21.9 in September, defying forecasts that had projected a dip to -22.4.
Rolf Burkl, a consumer expert at NIM, commented that this minor uptick in consumer sentiment, following a significant decline the previous month, suggests a stabilization at low levels. However, he cautioned that the index's stability around -21 points since June 2024 indicates that this increase cannot be considered the start of a significant recovery.
Economic expectations continued to decline for a second consecutive month in September, driven by concerns over rising unemployment. The economic expectations index dropped by 1.3 points to 0.7. In contrast, income expectations showed signs of recovery after experiencing a downturn in August, with the corresponding index climbing 6.6 points to 10.1, although this increase did not completely offset the previous month's decline.
GfK highlighted that escalating concerns about employment are mitigating the benefits of increased household purchasing power. Inflation has stabilized at around 2 percent, while wages and pensions are seeing more substantial increases.
The propensity to buy index increased by four points to -6.9 in September, marking its highest level since March 2022. Despite this rise, the propensity to buy remains notably low.
