Germany’s consumer sentiment is set to improve modestly in December, supported by a rise in households’ willingness to spend on Christmas shopping despite lingering concerns about future income. The GfK and NIM consumer climate index edged up to -23.2 for December from -24.1, matching analysts’ expectations. A second month of stronger buying appetite and a small drop in saving intentions helped lift the overall mood.

However, retail expectations remain cautious. An Ifo Institute survey shows that around a quarter of retailers anticipate weak Christmas sales, with many entering the holiday season without high hopes. Only about 10% expect strong performance, while the retail association HDE forecasts €126.2 billion in November–December sales, indicating only modest growth.

Despite the slight pickup in spending sentiment, households remain wary about the year ahead. Economic expectations dipped again, reflecting concerns over Germany’s slow recovery, with GDP expected to grow just 0.2% in 2025 after two years of contraction. Toy retailers—usually strong performers in the Christmas season—are among the most pessimistic, with half expecting poorer results than last year.

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