BERLIN – German consumer sentiment is set to improve for a fourth consecutive month in February as energy prices fall, a GfK institute survey showed on Tuesday.
The institute said its consumer sentiment index rose to -33.9 heading into February from a revised reading of -37.6 in January, but was slightly below forecasts from analysts polled by Reuters of -33.0.
“Falling energy prices, such as for gasoline and heating oil, have ensured that consumer sentiment is less gloomy,” said GfK consumer expert Rolf Buerkl. Nevertheless, he warned that 2023 will remain difficult for the German economy.
Buerkl said private consumption will not be able to positively contribute to overall economic growth this year, adding that this is signaled by the still very low level of the indicator.
Among the three sub-indices, income expectations posted a noticeable increase in January and economic expectations climbed to pre-war levels. However, willingness to buy continued its rollercoaster of the last few months and is currently weakening.
FEB 2023 JAN 2023 FEB 2022
Consumer climate -33.9 -37.6 -6.7
Consumer climate components JAN 2023 DEC 2022 JAN 2022
– willingness to buy -18.7 -16.3 5.2
– income expectations -32.2 -43.4 16.9
– business cycle expectations -0.6 -10.3 22.8
NOTE – The survey period was between Jan. 5 and Jan. 16, 2023.
The consumer climate indicator forecasts the development 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 the assessment of those questioned of the general economic situation in the next 12 months.