Data released by Gfk, a company under the NielsenIQ group, on Wednesday indicated that consumer sentiment in Germany continued to decline in February as well, with the consumer confidence index in Germany dropping to its lowest level since March of last year; marking a full year.
According to the data, the consumer climate index for February 2025 fell by 2.1 points to -24.7, driven by lower income expectations and a continued decline in German consumers' willingness to purchase for the second consecutive month, as decreasing income and growing savings concerns shrink consumer spending.
However, the desire to save increased slightly by 1.2 points, with income expectations reaching their lowest level in 13 months, as consumers anticipate a deterioration in financial conditions due to rising prices and political uncertainty.
Despite a slight improvement in economic expectations, with the economic index rising by 2.8 points, overall pessimism remains, as concerns about job security, particularly in industries such as automotive manufacturing, and increasing corporate bankruptcies contribute to cautious consumer behavior.
The results of the survey conducted by Gfk regarding German consumer confidence suggest that 2025 is expected to be another weak year for the German economy, with the likelihood of a recession for the third consecutive year.
It is worth noting that financial confidence is a key indicator of consumer spending, which constitutes the majority of overall economic activity. The survey is conducted by polling around 2,000 consumers, who are asked to evaluate the relative level of past and future economic conditions, including personal financial status, the climate for major purchases, and the overall economic situation.
