Financial News: German Consumer Confidence To Continue Negative Trend

German Consumer Confidence To Continue Negative Trend

02/26/2025 - 07:49:00 (RTTNews)

(RTTNews) - Consumer sentiment in Germany is set to continue its negative trend as higher prices, economic and political uncertainty weigh on households' income expectations and their willingness to buy, a closely watched survey showed on Wednesday.

The forward-looking consumer sentiment index unexpectedly fell to -24.7 in March from -22.6 in February, a survey jointly published by the market research group GfK and the Nuremberg Institute for Market Decisions revealed. The reading was expected to improve to -21.6.

Consumers' view regarding own personal financial situation deteriorated for the second straight month. The income expectations index dropped 4.3 points to a 13-month low level of -5.4 in February. The willingness to buy index dropped to -11.1 from -8.4 in January. This was the lowest score in eight months.

Households became more cautious about spending. The relocation of production abroad and job cuts in industry lead to increasing concerns about job security. The situation was exacerbated by the rising number of corporate bankruptcies.

The willingness to save index advanced to 9.4 in February from 8.2 in the previous month.

Nonetheless, German consumers were somewhat more positive about the general economic outlook. The economic expectations index rose 2.8 points to 1.2.

The research group GfK said the year 2025 threatens to be another weak year for the economy. The possibility of a third consecutive year of recession is not ruled out.

Official data confirmed that <a href=https://www.rttnews.com/3515686/german-gdp-shrinks-on-weaker-exports.aspx target=_blank >the largest euro area economy contracted 0.2 percent in the fourth quarter</a> as weak exports offset the improvement in final consumption expenditure.

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