According to the GfK Consumer Climate Study Germany for May 2021, German consumer sentiment was rather bright than muted during the month of May. Economic and income expectations are on the rise. By contrast, the propensity to buy suffered moderate losses after three consecutive increases. As a result, GfK is forecasting a value of -7.0 points in consumer confidence for June 2021, up 1.6 points from May this year (revised from -8.6 points). Economists had expected an increase to -5.2.

The good news is that German consumer confidence about the economy appears to be returning. The economic expectations indicator rises significantly in May. After rising by almost 34 points, it jumped to 41.1 points, its highest level in more than three years. The measurement in March 2018 was 42.8 points.

In the wake of a sharp rise in the economic outlook, income expectations also increased in May. After an increase of 10.2 points, the indicator climbs to 19.5 points. This compensates for a substantial part of the previous month's losses (-13 points). This actually represents an increase of currently more than 25 points compared to the same period of the previous year.

In contrast to income expectations, the propensity to buy is apparently unable to benefit from the sharp rise in economic optimism. After three consecutive increases, the propensity to buy suffered moderate losses, with the indicator dropping 7.3 points to a current value of 10 points. This is still 4.5 points higher than the corresponding figure for the previous year.

Despite the openings and relaxations that have been made or announced to date, a number of consumption options, especially in service sectors, are still not possible or only possible to a very limited extent. This is likely to slow down a noticeable recovery in propensity to buy at present.