German consumer sentiment declines more than expected in March – GfK

Data released on Wednesday by the German GfK market research institute revealed that consumer sentiment in Germany declined to -24.7 points in March, down from -22.6 points in the previous month, falling short of the expected -21.4 points.

The weaker-than-expected figures indicate a further deterioration in consumer confidence, adding to concerns about household spending amid an economic slowdown and political uncertainty in Europe’s largest economy.

Economists anticipate that sentiment will remain weak but express cautious optimism about potential policy shifts following the conservatives’ recent election victory. Their promises to implement growth-boosting measures could help steer the economy toward recovery after two consecutive years of contraction.

A swift formation of a new government—despite expected challenges in coalition-building—and the approval of this year’s budget are seen as critical steps to restore consumer confidence and stimulate spending.

However, the latest data show no signs of improvement, as rising prices and economic and political uncertainty have pushed consumer income expectations to their lowest level in over a year.

Additionally, consumers have become increasingly cautious with their spending, leading to a further decline in households’ willingness to buy, driven by growing concerns over business closures and job losses.