FRANKFURT, Germany, April 29, 2025 (BSS/AFP) - German consumer morale rose heading into May as hopes for economic revival under the incoming government offset worries about the impact of US tariffs, a key survey showed Tuesday.

The forward-looking indicator, published by pollsters GfK and the Nuremberg Institute for Market Decisions (NIM), came in at minus 20.6 points, a rise of 3.7 from the previous month.

It was the second-straight increase for the regular survey of around 2,000 people, although the indicator remained at low levels as Europe's top economy struggles to recover from a lengthy downturn.

US President Donald Trump's tariff onslaught is yet to have a "lasting impact on consumer sentiment in Germany," NIM consumer expert Rolf Buerkl said.

The "negative effects" of US trade policy are "being offset by the conclusion of coalition negotiations and the prospect of a fully operational government," he added.

Conservative Friedrich Merz is set to take over as German chancellor next week at the head of a coalition with the centre-left SPD after lengthy talks following an election in February.

Germany has faced months of political paralysis since outgoing Chancellor Olaf Scholz's government collapsed in November, and the country headed into 2025 without a new budget and some spending programmes hanging in the balance.

Even before taking office, Merz has taken steps towards boosting the stumbling economy, which shrank for the past two years.

The incoming chancellor led efforts to lift Germany's constitutional spending limits to make way for massive outlays on the armed forces and infrastructure.

The consumer survey highlighted in particular a weakening in the tendency to save, indicating a brightening climate.

But whether this continues in the months ahead, "remains to be seen and certainly also depends on how the trade conflict between the United States and the rest of the world develops," Buerkl said.

Export-dependent Germany stands to be hit hard by US levies, with the government last week downgrading its growth forecast for 2025 to zero.