Germany's economic recovery slows, prices rise, consumer confidence expected to drop.

A survey shows that due to price increases and fxpro crude oila slow economic recovery leading to increased household uncertainty, the German consumer confidence index is expected to slightly decline in July, ending a four-month upward trend. The survey results were released on Wednesday.

The consumer confidence index, jointly released by GfK and the Nuremberg Institute for Market Decisions (NIM), unexpectedly fell to -21.8 in July, down from a slightly revised -21.0 in June.

Analysts surveyed by Reuters had originally expected the index to rise to -18.9.

Along with other indicators, this points to a bumpy outlook for Europe's largest economy. The Ifo Business Climate Index and the HCOB Composite PMI also unexpectedly declined this month.

NIM consumer analyst Rolf Buerkl said: "The recent upward trend in consumer confidence has been interrupted, indicating that the slump in consumption will be difficult to shake off and setbacks are inevitable."

Income and economic expectations have both declined, while the willingness to purchase remains stagnant at a low level, and the savings inclination has slightly increased from an already high level.

Buerkl noted: "The slightly higher inflation rate in Germany in May has clearly triggered consumer uncertainty again, which is also reflected in the increased willingness to save." The inflation rate in May rose to 2.8% due to rising service prices.

He stated that a sustained recovery would only occur when consumers feel secure in their planning, which requires a relief from rising price pressures and a clear outlook for the future.

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