Germans express a desire for increased personal savings.
German Consumers Show Resurgence of Cautious Spending Habits
A third consecutive month sees a slight improvement in the consumer mood in Germany, but it remains weak, according to a recent study by market research company GfK and the Nuremberg Institute for Market Decisions (NIM). The consumer climate indicator for June 2025 is projected to rise moderately by 0.9 points to -19.9 points compared to the previous month, reaching its highest level since November 2024, albeit at a low compared to the average.
Consumers are displaying a decreasing appetite for purchases and an increasing inclination to save, factors contributing to the plateauing consumer mood. Rolf Bürkl, consumer researcher at NIM, attributes this phenomenon to unpredictable trade policies and tariffs within the US government, unstable stock markets, and concerns over a third consecutive year of stagnation. Given the current general economic situation, people seem to find it prudent to save.
GfK also identifies the back-and-forth of US President Donald Trump in the trade dispute with the EU as a cause of uncertainty among companies and consumers. This uncertainty, in turn, continues to restrain consumer spending. The study, carried out from May 1 to May 12, 2025, involved the interrogation of 2,000 consumers, commissioned by the EU Commission.
Economists voice similar concerns, expressing skepticism about the consumer climate's potential for significant growth. "The consumer climate has improved, but ultimately, it has been stagnating at the level of the corona lockdown for about a year," says Andreas Scheuerle of DekaBank. Alexander Krüger, chief economist of Hauck Aufhäuser Lampe Privatbank, concurs, stating that the mood is not yet favorable enough for substantial consumption increases. The further course will depend on employment concerns' development.
GfK attributes the slightly more positive assessment of personal financial situations to good wage agreements and a slight easing of price increases. However, despite improved income prospects, consumer demand remains subdued. Chief economist Cyrus de la Rubia of Hamburg Commercial Bank notes that the population displays great mistrust in the new coalition's ability to deliver after the perceived political standstill of the old government. Overall, the data suggests that private consumption may grow less robustly in the second quarter than in the first three months, but is nonetheless showing an upward trend.
Germany's consumer climate improvement is anchored in increased income expectations and a reduced propensity to save, likely due to the resolution of political uncertainty following successful coalition talks and the formation of a stable government. Despite this upward trend, the overall consumer climate remains deeply negative and below its long-term average. Economic expectations and the willingness to buy have improved only marginally, demonstrating that many consumers remain cautious and are not yet committed to significantly increasing expenditures.
The community and employment policies may need to address the ongoing cautious spending habits exhibited by German consumers, as they continue to save rather than spend due to unstable economic factors such as unpredictable trade policies and tariffs, stock market volatility, and concerns over stagnation. In this context, personal-finance and finance strategies should focus on promoting consumer confidence and encouraging spending, as the current economic uncertainty is restraining consumer expenditure.
