FX.co ★ German Consumer Morale Improves But Misses Forecasts

Germany's GfK Consumer Climate Indicator improved to -19.9 as we approach June 2025, compared to a revised -20.8 in the previous month, though it fell short of market expectations of -19.0. This increase marks the third consecutive month of improvement, reaching the highest level since last November. The rise is primarily attributed to a significant boost in economic expectations, which hit a two-year peak (13.1, up from 7.2 in May), as well as a considerable rise in income expectations (10.4 compared to 4.3 previously). However, consumer willingness to make purchases has declined (-6.4 from -4.9), and the propensity to save has risen (10.0 from 8.4), indicating continued consumer caution. "Consumer sentiment remains exceedingly low, with uncertainty still looming," remarked Rolf Bürkl, a consumer expert at NIM. He noted that ongoing consumer pessimism could be linked to unpredictable U.S. tariff and trade policies, stock market instability, and increasing concerns over a potential third successive year of economic stagnation. "In light of the general circumstances, people seem to find it prudent to save," Bürkl added.