German consumer confidence is set to improve in February, driven by strong rebounds in income expectations and willingness to buy, survey data published jointly by NIQ/GfK and the Nuremberg Institute for Market Decisions showed Wednesday.
The forward-looking consumer climate indicator rose more-than-expected to -24.1 from -26.9 in January. The score was expected to climb to -25.5 in February.
Economic and income expectations as well as the willingness to buy improved, while the willingness to save was mostly stable in January.
The willingness to save remained at a very high level in January and had no significant influence on the monthly confidence indicator, the survey showed. The corresponding index dropped to 17.9 from 18.7.
Although the consumer confidence index recovered notably from the strong losses, the indicator remained low, GfK said.
The increase in the minimum wage and reduced inflation concerns helped to boost income prospects. However, it remains to be seen whether the positive trend can be sustained in the coming months, NIM Head of Consumer Climate Rolf Burkl said.
“Ongoing geopolitical tensions or an escalation of trade conflicts could quickly tip the mood back into a negative direction,” said Burkl. “This means that the current upturn remains still fragile,” Burkl added.
The income expectations index advanced 12 points to 5.1 in January from -6.9 a month ago. In turn, the willingness to buy sub-index rose 3.5 points to -4.0 in January, which was the highest since March 2022.
Consumers were more positive about the economic outlook for the coming twelve months. The corresponding index climbed 5.4 points to 6.6 in January.
Consumers assess that the German economy is returning to a moderate growth path after three years of recession or stagnation. Economic experts currently expect the largest euro area economy to grow by around one percent in 2026.
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