German consumer sentiment improved more than expected heading into July as shoppers became more optimisitc and willing to buy after Europe's biggest economy lifted lockdown measures as coronavirus cases fell sharply, a survey showed today.

The GfK institute's consumer sentiment index is based on a survey of around 2,000 Germans.

It rose to -0.3 points, its highest level since August last year and higher than a revised reading of -6.9 points in the previous month.

The reading beat a Reuters forecast for a smaller rise to -4 points.

Consumers were far more optimistic regarding their personal income situation as well as overall economic development. Shoppers' expectations for the economy hit the highest level in ten years, reaching 58.4 points.

Germans' propensity to buy, however, rose only moderately.

"Despite the opening or withdrawal of restrictions, a number of industries - especially in the services sector - are still severely restricted," GfK consumer expert Rolf Buerkl said in a statement.

"This makes a noticeable recovery in private consumption in the second half of 2021 more likely," Buerkl said.