Published by Global Banking & Finance Review®
Posted on April 29, 2025
3 min readLast updated: January 24, 2026
German consumer sentiment improved in May as a new government formation eased concerns, despite trade tensions. GfK survey shows a rise to -20.6 points.
BERLIN (Reuters) -German consumer sentiment improved further heading into May as the prospect of a new government appeared to soothe households, countering some of the uncertainty unleashed by tensions over import tariffs for now, a survey indicated on Friday.
The consumer sentiment index, published by the GfK market research institute and the Nuremberg Institute for Market Decisions (NIM), remained firmly in negative territory at -20.6 points, up from a slightly revised -24.3 points the month before.
Analysts polled by Reuters had expected sentiment to rise to -26.0 points.
Both income expectations and the willingness to buy showed noticeable increases, while economic expectations improved only slightly, according to the survey.
"The realignment of the U.S. administration's trade policy, which began with the announcement of sharp tariff increases shortly before the start of the survey in early April, has apparently not yet had lasting impacts on consumer sentiment in Germany," said Rolf Buerkl at the NIM.
"It is clearly more important to German consumers at present that a government will be formed quickly," he added.
Conservative chancellor-in-waiting Friedrich Merz is expected to be sworn in on May 6 to lead a coalition government tasked with hauling the beleaguered German economy out of a protracted recession even as the tariff conflict deals a fresh blow to its export-driven industry.
MAY 2025 APR 2025 MAY 2024
Consumer climate -20.6 -24.3 -24.0
Consumer climate components APR 2025 MAR 2025 APR 2024
- willingness to buy -4.9 -8.2 -12.6
- income expectations 4.3 -3.1 10.7
- willingness to save 8.4 13.8 14.9
- economic expectations 7.2 6.9 0.7
NOTE - The survey period was from April 3 to 14.
The consumer climate indicator forecasts the progress of real private consumption in the following month.
An indicator reading above zero signals year-on-year growth in private consumption. A value below zero indicates a drop compared with the same period a year earlier.
According to GfK, a one-point change in the indicator corresponds to a year-on-year change of 0.1% in private consumption.
The "willingness to buy" indicator represents the balance between positive and negative responses to the question: "Do you think now is a good time to buy major items?"
The income expectations sub-index reflects expectations about the development of household finances in the coming 12 months.
The additional business cycle expectations index reflects respondents' assessment of the general economic situation over the next 12 months.
(Reporting by Rachel More, Editing by Friederike Heine)
The consumer sentiment index is at -20.6 points, which is an improvement from -24.3 points in April.
The prospect of a new government and increases in income expectations and willingness to buy contributed to the improvement in consumer sentiment.
The consumer climate indicator forecasts the progress of real private consumption, with a reading above zero indicating growth compared to the previous year.
The survey period was from April 3 to April 14.
The new government, led by conservative chancellor-in-waiting Friedrich Merz, is expected to address the challenges facing the German economy.
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