German consumer morale seen edging up in April

FRANKFURT: German consumer sentiment is set to edge up for a second straight month in April but the pace of the recovery remains sluggish, a key survey said Tuesday.

Pollster GfK said its forward-looking survey of some 2,000 people nudged up by 1.4 points to minus 27.4 points for April, after recording a modest increase a month earlier.

While respondents’ income expectations rose and they felt slightly less pessimistic about the outlook for Europe’s top economy than a month ago, the willingness to make large purchases remained stuck at a low level.

“The recovery of the consumer climate is progressing slowly and very sluggishly,” said Rolf Buerkl, consumer expert at the Nuremberg Institute for Market Decisions (NIM) which publishes the survey together with the GfK.

Rising wages and a robust labour market were “very good pre-conditions” for boosting consumption, he said, but “a high level of uncertainty” about the struggling German economy continued to put the brakes on spending.

“Domestic demand is still failing to stimulate the economy,” Buerkl said.

The German government recently slashed its economic forecast for 2024 to just 0.2 percent growth, from 1.3 percent previously, as the country battles headwinds including costly energy, high interest rates and weak global trade.

The economy is expected to have shrunk in the first quarter of 2024 but is seen gaining momentum later in the year as inflation eases further and the European Central Bank starts lowering borrowing costs.