German consumer sentiment improves ahead of May — GfK institute

With a new government likely coming into power, German consumer sentiment picked up as May approached.

Conservative chancellor-in-waiting Friedrich Merz has been tasked with pulling the German economy out of a prolonged recession. The upcoming change in leadership has reassured households, easing some of their concerns over US import tariffs. Merz is set to be sworn in on May 6. He will lead a coalition government.

According to the GfK market research institute and the Nuremberg Institute for Market Decisions, the consumer confidence index remains negative at -20.6, though this shows a modest recovery from -24.3 last month.

Reuters reports analysts had projected sentiment to drop to -26 points. Yet both income expectations and the willingness to buy rose significantly, economic expectations showed only slight improvement. For German consumers, the top priority now is the quick formation of a new government.