BRUSSELS (dpa-AFX) - German consumer sentiment is set to improve in July driven by the moderate rise in income and economic expectations, latest results of the NIM Consumer Climate powered by GfK showed Thursday.
The consumer sentiment index rose to -29.2 in July from -29.7 in the previous month. However, the reading was weaker than economists' forecast of -27.8.
Income expectations rose only slightly in June and consumers remained less optimistic about their future financial situation than they were before the start of the war in Iran, the survey showed. The income expectations index climbed to -12.2 in June from -13.0 in May.
The economic expectations index advanced to -8.7 from -11.2. Despite the majority of consumers expecting the economic situation to worsen over the next twelve months, the pessimism seems to be easing, GfK said.
Price expectations decreased for the second straight month in June. The corresponding index fell to -2.9 from -0.4 in May. The decline is likely attributable to the fuel rebate, which expires at the end of the month.
Further, the willingness to buy dropped to -13.4 from -13.2 in the prior month. Consumers viewed that the timing for making major purchases remained rather unfavourable.
Meanwhile, the willingness to save, which indicates whether people consider it advisable to save given the general economic situation, remained unchanged at 13.9 in June.
'Consumer Climate is currently stabilizing at a low level,' NIM Head of Consumer Climate Rolf Burkl said. Burkl noted that the willingness to buy remains in the pessimistic range and the willingness to save is not decreasing either.
'There are no signs yet of a return toward pre-war levels, even though the peace negotiations and the decrease in crude oil prices are easing consumers' inflation concerns and economic expectations are brightening slightly again,' said Burkl.
The survey showed that the peace deal between the US and Iran helped to ease geopolitical concerns and also contributed to a cooling of tension on the international energy markets.
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