German consumer sentiment is set to improve in July driven by a moderate rise in income and economic expectations, the latest consumer climate survey by the Nuremberg Institute for Market Decisions showed on Thursday.
Based on consumer expectations for July, the consumer sentiment index rose to -29.2 in June from -29.7 in the previous month.
Income expectations rose only slightly in June and consumers remained less optimistic about their future financial situation than they were before the start of the war in Iran, the survey showed. The income expectations index climbed to -12.2 in June from -13.0 in May.
The economic expectations index advanced to -8.7 from -11.2. Despite the majority of consumers expecting the economic situation to worsen over the next 12 months, the pessimism seems to be easing, the institute said.
Price expectations decreased for the second straight month in June, with the corresponding index falling to -2.9 from -0.4 in May. The decline is likely attributable to a fuel tax cut, which expires at the end of the month.
Further, the willingness to buy dropped to -13.4 from -13.2 in the prior month, as consumers continue to believe that the timing for making major purchases remained rather unfavourable.
Meanwhile, the willingness to save remained unchanged at 13.9 in June.
The consumer climate "is currently stabilizing at a low level," NIM Head of Consumer Climate Rolf Bürkl said.
"There are no signs yet of a return toward pre-war levels, even though the peace negotiations and the decrease in crude oil prices are easing consumers' inflation concerns and economic expectations are brightening slightly again," he said.
