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German consumer sentiment shows signs of improvement

Nov 8, 2024 Germany

German consumer sentiment rose more than expected in November despite high prices and a difficult labour market, according to GfK and the Nuremberg Institute for Market Decisions (NIM)

The consumer sentiment index, published by GfK and the Nuremberg Institute for Market Decisions (NIM), increased more than expected going into November to minus 18.3 points from a slightly revised minus 21.0 points in the previous month. The index assesses the consumer climate in terms of willingness to buy, income expectations and business cycle expectations to forecast the progress of real private consumption in the following month.

Thus, according to the survey conducted between the 4^th and the 15^th of October, income expectations and the propensity to buy improved for the second consecutive month, while the propensity to save declined slightly, pushing the overall index to its highest level since April 2022, albeit still at a low level.

However, economic expectations for the next twelve months for the country’s economy fell for the third time in a row. “The uncertainty caused by crises, wars and rising prices is still very pronounced at the moment and prevents positive factors for consumption, such as noticeable real income increases, from having their full effect”, said NIM analyst Rolf Buerkl.

In addition, reports of a rising number of bankruptcies and plans to cut jobs or relocate production abroad are also hampering a significant recovery.

Source: reuters.com

Image Credits: bloomberg.com

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