Germans express intent to increase savings
German Consumers Remain Wary, Cautious About Spending
German consumers have maintained a cautious stance towards spending, with the consumer climate remaining weak, according to a recent study by GfK and the Nuremberg Institute for Market Decisions (NIM). The sediment appears to have eased slightly for the third consecutive month, but it remains far below historical averages.
The study revealed that consumers' purchasing inclination is decreasing, while their inclination to save is increasing, hampering the consumer mood. Despite these braking effects, the consumer climate has climbed to its highest level since November 2024, marking a slight improvement.
Rolf Bürkl, a consumer researcher at NIM, commented on the factors driving the weak consumer climate. He cited unpredictable trade and tariff policies from the U.S. government, financial market turbulence, and fears of a third consecutive year of stagnation as significant contributors to the ongoing cautiousness among consumers.
Economists also weighed in on the consumer climate, expressing caution. Andreas Scheuerle of Deka Bank highlighted that the mood is not yet prepared for significant consumption increases, and Alexander Krüger of Hauck Aufhäuser Lampe Privatbank pointed out that the course will depend on the development of employment concerns. Both experts agreed that a turnaround in the consumer climate is potentially on the horizon but may still be premature to declare.
Chief economist Cyrus de la Rubia of Hamburg Commercial Bank suggested that mistrust remains widespread among the population concerning the new coalition's ability to accomplish anything amidst perceived political standstill from the old administration. In general, these numbers suggest that private consumption might not rise as strongly in the second quarter as it did in the first three months but appears to be trending upward.
The survey was conducted with 2,000 consumer interviews from May 1 to May 12, 2025, on behalf of the EU Commission.
Enrichment Data Analysis:- Ongoing unpredictability in U.S. tariff and trade policies, stock market volatility, fears of a third consecutive year of economic stagnation, and broader geopolitical risks are contributing to German consumers' uncertainty and the desire to save.- Despite improved economic and income expectations, the propensity to save has increased once again, indicating that consumers remain cautious and prefer to hold onto their money in the current climate.
- Despite the slight improvement in the consumer climate, the continued inclination of German consumers to save, driven by factors such as unpredictable trade policies, financial market turbulence, and fears of economic stagnation, indicates a need for a comprehensive review of the community and employment policies to boost consumer confidence and encourage spending.
- As German consumers show a growing preference for saving, it is crucial for personal-finance advisors and financial institutions to develop strategies that foster investment in avenues like stock markets and real estate, thereby promoting economic growth through better employment and finance policies.
