Consumer sentiment in Germany saw a slight increase in October, according to the latest consumption barometer from the German Trade Association (HDE).
The consumer sentiment index increased compared to the previous month and reached the level it was last at the beginning of 2022, before Russia's invasion of Ukraine, the HDE noted.
However, the association has highlighted that private consumption is only likely to gain impetus next year.
The propensity to buy continued its positive trend in October, while the propensity to save decreased in contrast to previous months, indicating a shift from saving to consumption.
As a result, no collapse in private consumption is likely in the fourth quarter of this year, the HDE noted.
Other Highlights
Consumers are pessimistic about further economic developments in Germany as their economic expectations deteriorated slightly compared to the previous month.
The positive trend in consumer sentiment in October, that was interrupted in the previous month, does not mark a reversal and a recovery is not expected to begin until 2024, according to the HDE.
The HDE consumption barometer is based on a monthly survey of 1,600 people on their propensity to buy, propensity to save, financial situation and other factors relevant to consumption.
The consumption barometer, created by the Handelsblatt Research Institute (HRI) on behalf of the HDE, has an indicator function for private consumption.
It does not reflect current consumer behaviour, but the expected mood in the next three months.
A separate survey GfK institute indicated that sentiment among German consumers is set to fall in October, as persistently high inflation encourages people to save and blots out the chances of a recovery before the end of the year.
