Economy Despite the Crisis
The new financial optimism of the Germans
As of: 06:06 a.m. | Reading time: 3 minutes
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Quelle: Getty Images/Maskot
The economic forecasts are getting worse from quarter to quarter. But Germans view their financial situation more positively – according to a survey, almost two out of three Germans rate it as good or very good. But it also depends on the age how good the judgments are.
The German economy is on the decline. It was only on Wednesday that the five leading economic institutes drastically lowered their growth expectations for the current year. In 2024, only an increase in economic output of 0.1 percent is expected, according to the so-called spring report. In the fall they had forecast 1.3 percent growth.
The mood of consumers, however, is different. The Germans’ assessment of their financial situation has improved, as shown by Teambank’s liquidity index, which WELT has received in advance. Since 2013, the team bank, which is part of DZ Bank, has been collecting the sentiment indicator with questions about the financial situation of the population and their expectations for the future. A good 3,000 adults of all ages nationwide are surveyed twice a year by the Yougov opinion research institute.
However, the increase in March is only a delicate shoot. The index value has risen to eight points. In June 2023, the mood had improved slightly to 5.5 points. The index reached its highest level in mid-2019 at 31.5 points. Values between minus 100 and plus 100 are possible.
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Christian Polenz, the new CEO of Teambank at the turn of the month, says: “Without a sustained overcoming of the economic stagnation in Germany and the geopolitical uncertainties, consumers are likely to continue to be cautious about their spending.” However, the ongoing tariff disputes are likely to lead to further income increases. and lead to mood increases. Also because inflation is now on the decline again, says Polenz.
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After all, almost two out of three Germans rate their current financial situation overall as good or very good. And this despite the fact that high inflation of 5.9 percent in 2023 has reduced the purchasing power of households.
However, inflation has left its mark, as the financial situation has only improved for just under one in four people in the past twelve months. On the other hand, one in three reports a deterioration. With inflation declining, 34 percent hope that their financial situation will improve in the next three to five years. 29 percent, on the other hand, expect things to get worse.
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It is noticeable that the bad mood increases with age. While the financial situation has improved in the past twelve months for 34 percent of 18 to 29 year olds, this only applies to eleven percent of 50 to 79 year olds. A similar picture emerges when it comes to expectations for the next three to five years. 58 percent of 18 to 29 year olds expect an improvement here, but only 18 percent of those over 50 years old.
The German Savings Banks and Giro Association found out in a survey at the end of February that Germans’ satisfaction with their finances was falling, although here too the positive assessments predominated. Around 34 percent of German citizens rated their current financial situation as very good to good. A year ago it was 38 percent, and in 2021 it was even 43 percent. Around 26 percent of those surveyed rated their financial situation as rather bad or very bad. This is not a contradiction to the team bench study.
An analysis by the research department of Teambank parent DZ Bank also confirms that consumer sentiment is cautiously positive. However, another indicator of the financial situation was considered: the propensity to consume. The analysts cite the slight increase in the GfK consumer climate in April as evidence.
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Despite rising wages, a robust labor market and moderate inflation, consumers have so far held back on spending. According to the survey, one reason for the lack of optimism is the continued gloomy economic and income expectations. This means that the recovery of the consumer climate is only making slow progress, according to the verdict.
According to the spring report presented on Wednesday, private consumption is the only hope for the German economy until 2025 – private consumer spending is responsible for around half of the gross domestic product in Germany.