By Ed Frankl
Germany’s consumer confidence improved slightly, driven by rising income expectations, even as sentiment remains subdued amid a weak economic climate.
The forward-looking consumer-sentiment index, published on Tuesday by research group GfK and the Nuremberg Institute for Market Decisions, forecast confidence to rise slightly to minus 29.0 in March from minus 29.6 this month. The index matched economists’ expectations, according to a poll compiled by The Wall Street Journal.
The overall reading was driven by the measure for income expectations, which rose sharply, jumping 15.2 points to minus 4.8 points, the highest value since February 2022, ahead of Russia’s full-scale invasion of Ukraine, the data showed Tuesday.
However, the index for willingness to buy held relatively stable, while that of willingness to save ticked up to its highest value since the financial crisis of 2008.
“There is great uncertainty among consumers. In addition to the constantly rising prices, the weaker economic forecasts for the German economy this year are likely to be another important reason for this,” said Rolf Buerkl, consumer expert at NIM.
Germany’s government last week cut its forecast for economic growth in 2024 to 0.2%, from 1.3% previously.
Any rapid recovery in consumer spending isn’t expected, with inflation and the uncertainty among consumers needing to fall before they will invest or make large purchases again, the GfK/NIM report said.
Write to Ed Frankl at edward.frankl@wsj.com
