German consumer sentiment outlook modest after slight pickup, GfK finds

        *
      German consumer indicator for January rises slightly


        *
      Consumer climate at low level, stagnation since mid-year


        *
      Companies facing big cuts, snap election adds to
uncertainty


        *
      Germany economy to shrink



       BERLIN, Dec 19 (Reuters) - German consumer sentiment is
expected to improve slightly at the start of next year but at a
low level as high food and energy prices and job insecurity
weigh on households, a survey showed on Thursday.
    The consumer sentiment index, published by GfK and the
Nuremberg Institute for Market Decisions (NIM), rose more than
expected going into January, to -21.3 points from a slightly
upwardly revised -23.1 points the month before.
    Analysts polled by Reuters had expected a reading of -22.5.
    GfK said the improvement only partially compensated for
previous declines and sentiment remained at a very low level
with stagnation stretching back to the middle of the year.
    "A sustained recovery in consumer sentiment is not yet in
sight, as consumer uncertainty is still too high. The main
reason is high food and energy prices," said NIM analyst Rolf
Buerkl.
    "In addition, concerns about job security are growing in
many sectors," he said.
    Several major companies, such as Volkswagen, slash
production and cut costs, raising fears of job losses. The Ifo
institute's monthly survey showed business morale was
deteriorating more than expected this month.
    A snap election in February is adding to uncertainty for
Europe's biggest economy which is on track for a second
consecutive year of contraction in 2024 and is trailing its euro
zone partners.

                                JAN 2025  DEC 2024  NOV 2024
 Consumer climate               -21.3     -23.1     -18.4
 Consumer climate components    DEC 2024  NOV 2024  DEC 2023
 - willingness to buy           -5.4      -6.0      -8.8
 - income expectations           1.4      -3.5      -6.9
 - business cycle expectations   0.3      -3.6      -0.4

    NOTE - The survey period was from Dec. 5 to Dec. 16, 2024.

The consumer climate indicator forecasts the progress of real
private consumption in the following month.

An indicator reading above zero signals year-on-year growth in
private consumption. A value below zero indicates a drop
compared with the same period a year earlier.

According to GfK, a one-point change in the indicator
corresponds to a year-on-year change of 0.1% in private
consumption.

The "willingness to buy" indicator represents the balance
between positive and negative responses to the question: "Do you
think now is a good time to buy major items?"

The income expectations sub-index reflects expectations about
the development of household finances in the coming 12 months.

The additional business cycle expectations index reflects
respondents' assessment of the general economic situation over
the next 12 months.

The Reuters poll for the GfK consumer sentiment is from Dec. 18

 (Reporting by Madeline Chambers, editing by Kirsti Knolle)