(RTTNews) - Germany's consumer sentiment is set to strengthen at the start of next year amid a robust rebound in income expectations despite the economy undergoing a downturn, a closely watched survey revealed on Wednesday.
The forward-looking consumer confidence index rose to -25.1 from a revised -27.6 in December, survey data from the market research group GfK and the Nuremberg Institute for Market Decisions showed. Economists had forecast a reading of -27.0.
Consumer sentiment is improving again after a recent period of stagnation, the Gfk said. The latest score was the highest since August, when it was -24.6.
"It remains to be seen whether the current increase represents the start of a sustained recovery in consumer sentiment," NIM consumer expert Rolf Burkl said.
Consumers still have major worries and geopolitical crises and wars, sharply rising food prices and discussions around national budget for 2024 continue to cause uncertainty, Burkl noted.
"As a result, the level of consumer sentiment is currently still very low," Burkl added.
In order for a lasting upturn in consumer sentiment, it is required to address the causes of uncertainty and find a solution, Burkl observed.
In other words, further measures should be taken towards price stability and solutions to various crises should be evolved.
The income expectations index of the survey climbed 9.8 points to reach -6.9 in December, which was the highest since July, when it was at -5.1 points.
Households expect a significant growth in the most important income sources, namely wages and salaries, or pensions.
The willingness to buy measure gained 6.2 points to reach -8.8 in December, which was the highest since March last year, when the score was -2.1 points.
The survey showed that economic pessimism continued to decline in December. The economic expectations index of the survey added 1.9 points to touch -0.4 in December.
Despite the slight increase, consumers are still very cautious about further economic developments in Germany, GfK said.
The survey was conducted by GfK and the Nuremberg Institute for Market Decisions on behalf of the European Commission.
