German consumer sentiment is set to nudge up in April as energy prices have relented somewhat from record highs, though a full recovery is not in sight anytime soon, showed a GfK institute survey today.
The institute forecast its consumer sentiment index to improve to -29.5 heading into April from a revised reading of -30.6 in March.
This was slightly below the expectations of analysts polled by Reuters of -29.
April's reading, rising for the sixth month in a row, shows sentiment is on its way towards recovery, GfK said, but the pace of growth has slowed noticeably compared with previous months.
"The anticipated loss of purchasing power is preventing a sustained recovery of domestic demand," said GfK consumer expert Rolf Buerkl, which means private consumption is not likely to contribute to the German economy in a positive way this year.
"This is also indicated by the still very low level of consumer confidence," he said.
The sub-index measuring income expectations was the main contributor to the increase in sentiment, rising to its highest level in 10 months, -24.3, in March from -27.3 in February.
"The income outlook is currently benefiting from noticeably lower prices for energy, especially for gasoline and heating oil. Nevertheless, inflation will remain high," Buerkl said.
