German consumer mood improves again after heavy falls

German consumer confidence has edged up again following a long period of decline, a survey showed Friday, the latest indication that concerns are easing about the severity of an approaching downturn.

Pollster GfK’s forward-looking barometer registered minus 40.2 points for December, an increase of 1.7 points from November.

The gauge for November had also improved slightly, following several months of declines which saw it fall to a historic low in October.

Germany is facing soaring inflation, particularly due to high energy costs following Russia’s invasion of Ukraine, and the government has forecast the economy will contract next year.

But Rolf Buerkl, a GfK consumer expert, said the group’s latest survey showed that “consumers’ long-standing fears about exploding energy prices have eased somewhat”.

Energy prices had stabilised slightly while consumers also believe that government relief measures will bring prices down, he said. 

Despite the “slight improvement”, the consumer climate remained difficult, he added. 

Berlin has rolled out stimulus measures to help consumers and businesses, including a 200-billion-euro ($208 billion) fund to tackle high energy prices. 

After months flashing red, indicators and surveys are now starting to show a growing belief that the looming recession may not be as bad as first feared.

On Thursday, a closely watched gauge from the Ifo institute showed business confidence improving, while earlier in November one from the ZEW institute indicated an improvement in investor confidence.