(Sharecast News) - Consumer sentiment in Germany has started to stabilise, a closely-read survey showed on Thursday, although it remains subdued.
The latest consumer climate indicator from GfK and the Nuremberg Institute for Market Decisions ticked up to -29.2 heading into July, compared to June's revised -29.7 and May's -33.1. The improvement was not as strong as hoped, but GfK said there were signs sentiment was stabilising.

In particular, it flagged slightly more positive income expectations, while the willingness to save was unchanged.

Rolf Burkl, head of consumer climate at NIM, acknowledged: "Consumer climate is currently stabilising at a low level."

But he acknowledged: "The willingness to buy remains in the pessimistic range and the willingness to save is not decreasing either. There are therefore 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."

Both business and consumer sentiment in Germany has been hit hard by war in the Middle East, which sent global energy prices soaring and reignited inflation fears.

The US and Iran this month signed a 14-point memorandum of understanding, under which they agreed to cease fighting and reopen the Strait of Hormuz while a permanent peace deal is negotiated. Oil prices have fallen sharply in response, but tensions remain high and there is still no guarantee a long-term agreement will be struck.

The indicator was based on around 2,000 consumer interviews, with data collected between 4 and 15 June.

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