German consumer sentiment is expected to deteriorate unexpectedly in March, as households grow more cautious about spending amid rising geopolitical tensions and concerns over government social policies, according to a new survey released on Wednesday.
The consumer sentiment index, compiled by GfK and the Nuremberg Institute for Market Decisions (NIM), declined to -24.7 points for March from a revised -24.2 in the previous month. Economists had forecast an improvement to -23.1, making the drop a negative surprise for markets.
Willingness to Spend Falls Sharply
Overall consumer confidence in Germany was weighed down by a significant drop in willingness to buy. The indicator fell to -9.3 points in February from -4.0 in January. At the same time, households showed a greater preference for saving, with the willingness-to-save index rising by 1 point.
Rolf Buerkl, head of consumer climate at NIM, said that although there are signs of a slight economic recovery, consumers remain cautious.
He noted that geopolitical tensions and uncertainty surrounding social policy continue to fuel concerns, encouraging households to increase savings rather than spend.
Economic Expectations Weaken
Consumers’ economic expectations for the next 12 months declined by more than 2 points to 4.3. Despite the monthly drop, the figure remains roughly 3 points higher than the same period last year.
Germany, Europe’s largest economy, continues to face challenges including geopolitical uncertainty, elevated business costs and weak domestic demand. Analysts expect growth in 2026 to rely heavily on statistical and calendar-related factors rather than strong underlying momentum.
Breakdown of Consumer Climate Indicators
For March 2026, the headline consumer climate reading stands at -24.7, compared with -22.6 previously projected and -24.2 in February.
Key sub-components for February 2026 include:
- Economic expectations: 4.3 (down from 6.6 in January)
- Income expectations: 6.3 (up from 5.1 in January)
- Willingness to buy: -9.3 (down from -4.0)
- Willingness to save: 18.9 (up from 17.9)
The survey was conducted between January 29 and February 9, 2026.
An index reading above zero signals year-on-year growth in private consumption, while a value below zero indicates a decline compared with the same period a year earlier. According to GfK, a one-point change in the index corresponds to a 0.1% year-on-year change in private consumption.
The willingness-to-buy indicator measures whether consumers believe it is a good time to purchase major items. The income expectations index reflects anticipated changes in household finances over the next 12 months, while the economic expectations index captures views on the broader economic outlook.
The exchange rate used in the survey was $1 = 0.8618 euros.
