MARKET INSIGHT - German Consumer Confidence to Rise as Political Climate Stabilizes

Foreks - Melanie Debono from Pantheon Macroeconomics forecasts that German consumers will begin to express more confidence as the political environment stabilizes and will likely increase their spending as real incomes rise. The December GfK consumer confidence index showed a slight recovery following the fall of Chancellor Olaf Scholz's government and the new elections planned for the new year, although it remained at relatively low levels. However, Debono noted that political turmoil tends not to severely impact spending levels, stating, "We expect consumer confidence to recover once the political landscape in the country stabilizes. After all, as wage increases continue to outpace inflation, real disposable incomes will continue to recover."