Consumer climate in Germany continues to recover - GfK

According to the report from GfK Group, consumers in Germany are recovering from the shock of the coronavirus thanks to the rapid reopening of the German economy and society. Both economic and income expectations, as well as propensity to buy, are rising. As a result, GfK has forecast a figure of -9.6 points for July 2020, 9 points higher than its level in June of this year (revised to -18.6 points). 

Consumers are increasingly reawakening from the state of shock that led to an unprecedented fall in sentiment as recently as April. This means that the consumer climate is rising for the second time in a row. As a consequence, the indicator has gained more than 13 points since its low in April of this year. It should be noted, however, that a value of -9.6 points is the third lowest value ever recorded for the GfK Consumer Climate in Germany.

"The faint light at the end of the tunnel, which was already apparent last month, is apparently getting somewhat brighter," explains Rolf Bürkl, GfK consumer expert. "The extensive support provided by the economic stimulus packages, such as the announcement of a temporary reduction in value-added tax (VAT), is certainly a contributing factor. Provided that retailers and manufacturers also pass these reductions on to consumers, it can be assumed that one or two planned purchases will instead be made in the second half of 2020, thereby supporting consumption this year." 

As in the previous month, a significant drop in the propensity to save is also supporting the consumer climate in June, which is down 15.4 points. For the second time in a row, consumer economic expectations increased in June. The increase is surprisingly obvious with a rise of 18.9 points. At 8.5 points, the indicator has managed to crawl back up into positive territory, i.e. above its long-term average of zero points.  Also for the second time in a row, income expectations rose in June. The indicator rose by 12.3 points to 6.6 points. Nevertheless, it is still close to 39 points below its value this time last year.