GfK Consumer Climate Plunges to -28: Iran War Fuels Anxiety

Lowest Level in Two Years

Consumer sentiment in Germany has suffered a dramatic collapse. The GfK consumer climate index, jointly compiled by the Nuremberg Institute for Market Decisions (NIM) and GfK, fell to −28.0 points for April 2026 — a decline of 3.2 points compared to the revised previous month's value of −24.8. The result was significantly below economists' expectations, who had only predicted a decline to around −26.5.

It is the lowest value since March 2024, when the after-effects of the energy crisis following the Ukraine war severely burdened German households. The fragile recovery of Europe's largest economy is thus once again on the brink.

All Indicators in Free Fall

Particularly alarming is the collapse in income expectations: they plummeted by 12.6 points to −6.3 — after a value of +6.3 in the previous month. This is the first time in months that they have slipped back into negative territory. Economic expectations fell even more drastically: from +4.3 to −6.9, a decrease of 11.2 points. This is the lowest level since December 2022.

The propensity to buy continued to decline, falling to −10.9 points, while the propensity to save remains at 18.5 points, a level last reached in February 2008. The message is clear: Germans prefer to save their money rather than spend it.

Iran Conflict as Main Driver

The cause of the slump in sentiment is primarily geopolitical in nature. The military conflict in Iran has shaken the energy markets and driven up prices for oil, gas, and gasoline. According to the NIM survey, 60 percent of consumers expect energy prices to remain permanently high. More than 90 percent of the pessimistically inclined respondents also believe that the world has become more uncertain due to the conflict.

NIM consumer expert Rolf Bürkl warned that consumers expect "inflation to pick up again due to rising energy prices" and that the already weak economic recovery will be further hampered.

Consequences for Trade and Economy

The effects on the retail sector are already noticeable. The forecast for Easter business is only 2.1 billion euros — a decrease of 6.5 percent compared to the previous year. Industries with higher-value consumer goods such as furniture, electronics, and household appliances are particularly under pressure.

Two scenarios are emerging for the overall economy: If the Iran conflict continues beyond the summer and energy prices remain high, gross domestic product is only expected to grow by 0.2 percent in 2026. In the more favorable main scenario — with de-escalation and falling energy costs — economic researchers still expect 0.9 percent growth.

Outlook Remains Bleak

The data mark a significant turning point. After a phase of cautious recovery in early 2026, supported by positive wage agreements and falling interest rates, the Iran conflict has destroyed consumer confidence within a few weeks. As long as the geopolitical situation remains tense, there is likely to be little change in the consumer restraint of Germans — with noticeable consequences for trade, industry, and the economic recovery as a whole.