German Consumer Sentiment Hits Three-Year Low Amid Rising Energy Prices
German Consumer Sentiment and Economic Outlook
BERLIN, April 27 (Reuters) - German consumer sentiment is expected to worsen heading into May as households' income expectations have become bleaker in the face of rising inflation, driven higher by the war in Iran and its knock-on effects on energy prices, a survey found on Monday.
Consumer Sentiment Index Findings
The consumer sentiment index, published by the Nuremberg Institute for Market Decisions (NIM) and the GfK market research institute, showed sentiment dropping to -33.3 points for May from a slightly downwardly revised -28.1 in April.
Lowest Levels Since 2023
For the gauge, newly branded as the "NIM consumer climate index powered by GfK", it is the lowest level since February 2023, said NIM's head of consumer climate, Rolf Buerkl.
Income Expectations Collapse
"Income expectations are collapsing as a result of rising inflation," added Buerkl, after that corresponding indicator took an 18.1-point nose-dive, landing at -24.4 points.
Impact of Rising Inflation and Energy Prices
EU-harmonised German inflation reached 2.8% in March due to surging energy prices, and economists foresee further increases the longer the Iran war drags on.
Household Spending and Propensity to Buy
"Against this backdrop, people also consider the current time to be less favourable for major purchases," added Buerkl, with the indicator measuring household's propensity to buy hitting a two-year low.
Economic Expectations and Historical Context
Consumers were similarly more pessimistic about the prospects for Europe's largest economy, with economic expectations dropping 6.8 points to hit -13.7.
Comparison to Previous Years
That is roughly the same level as seen in April 2022, at the start of Ukraine war, according to the survey.
Key Consumer Climate Data
Monthly Consumer Climate Index
MAY 2026 APR 2026 MAY 2025
Consumer climate -33.3 -28.1 -20.8
Consumer Climate Components
Consumer climate components APR 2026 MAR 2026 APR 2025
Economic Expectations
- economic expectations -13.7 -6.9 7.2
Income Expectations
- income expectations -24.4 -6.3 4.3
Willingness to Buy
- willingness to buy -14.4 -10.9 -4.9
Willingness to Save
- willingness to save 16.1 18.5 8.4
Survey Methodology and Indicator Explanations
• The survey period was April 2-13, 2026.
• 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 economic expectations index reflects respondents' assessment of the general economic situation over the next 12 months.
(Reporting by Miranda MurrayEditing by Ludwig Burger)
