BERLIN, Dec. 19 (Xinhua) -- Germany's consumer sentiment is set to weaken further heading into the new year, a monthly survey showed on Friday, underscoring a sharp rise in households' propensity to save amid renewed inflation fears and broader economic uncertainty.
The GfK consumer climate index, a forward-looking indicator of private consumption, is forecast to fall by 3.5 points to minus 26.9 in January 2026, its lowest level since April 2024, according to the market research institute.
"Consumer sentiment in Germany is disappointing at the end of the year," said Rolf Buerkl, head of consumer climate at GfK, describing the decline as a "false start" for consumer confidence heading into 2026.
The survey attributed the deterioration primarily to a strong rise in households' propensity to save. Buerkl said the savings indicator climbed to its highest level since the 2008 financial crisis, driven by renewed inflation fears and uncertainty surrounding domestic economic policy, including debates over the future of the pension system.
Inflation pressures have also weighed on household incomes, with respondents' expectations for earnings over the next 12 months falling for a third consecutive month, partly reflecting a more pessimistic outlook for real wages, the report said.
Concerns over Germany's labor market have further undermined income confidence, as companies continue to cut jobs. Data released by the ifo Institute on Friday showed its employment barometer has been on a downward trend since 2021, falling in December to its lowest level in more than five and a half years.
By contrast, consumers' economic expectations improved slightly. However, GfK noted that the sub-index was only 0.9 points higher than a year earlier, suggesting that German consumers currently expect no more than a moderate economic recovery in 2026.
Several leading German economic research institutes forecast last week that the economy will return to growth in 2026, expanding by 0.8 percent to 1 percent, after barely growing in 2025. They now expect Europe's largest economy to grow by just 0.1 percent this year, down from a previous forecast of 0.2 percent.
