Consumers in Germany hold back spending, save more amid uncertainty. (picture alliance/dpa/Elisa Schu)
German consumers are holding back on spending, slowing the recovery in private consumption, a survey showed.
The consumer research institutes GfK and NIM said their latest consumer climate survey for June showed a growing tendency to save, which is weighing on sentiment and preventing the consumer climate from continuing its recent recovery.
The consumer climate index is expected to dip slightly by 0.3 points to minus 20.3 in July.
The survey, commissioned by the European Commission, polled 2,000 consumers in Germany between May 30 and June 11.
"After three consecutive increases, the consumer climate has thus suffered a slight setback," said Rolf Bürkl, consumer expert at NIM. He explained that while income prospects and economic expectations have improved, the increasing tendency to save is cancelling out those positive effects.
Bürkl said cautious savings habits show ongoing uncertainty and a lack of confidence in planning ahead.
Hopes for recovery
From the consumers' perspective, however, signals for a recovery in the German economy in the coming months are strengthening.
The economic indicator climbed by seven points to 20.1 in June, the institutes said.
The researchers said many consumers seem to expect an economic recovery over the course of 2025 - a confidence likely driven by major infrastructure and defence spending approved in Berlin, along with generally positive economic forecasts.
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