Economic expectations in Germany fell to their lowest level in two years
Economic expectations of financial experts in Germany plunged to their lowest level in two years in August. The index of the Center for European Economic Research (ZEW) in Mannheim fell to 19.2 points, as the institute announced on Tuesday. That was 22.6 points lower than in the previous month, when expectations had fallen for the first time in a year. The assessment of the current situation also deteriorated significantly.
"The economic outlook for Germany is deteriorating," explained ZEW President Achim Wambach. A similarly strong decline in expectations had last occurred in July 2022. Factors contributing to this included "disappointing business figures" from the US economy, uncertain monetary policy, and growing concerns about an escalation of the Middle East conflict.
Expectations for economic development in the eurozone, the US, and China also fell significantly. "This is particularly affecting the expectations of German industries, especially those that are export-intensive," explained Wambach. Expectations for the eurozone stood at 17.9 points, a decrease of 25.8 points from July.
In the previous month, when expectations had fallen for the first time in a year, the assessment of the current situation had improved. However, this was not the case this time. The assessment of the current situation fell by 8.4 points to minus 77.3 points.
The ZEW asks financial experts from banks, insurance companies, and the financial departments of large corporations for their assessments of important international financial market data, such as inflation rates, interest rates, stock indices, exchange rates, and oil prices, to gain insights into future economic development. The ZEW index is considered an important indicator for the future economic development of Germany.
The current survey, conducted from August 5 to 12, involved 152 analysts and institutional investors.
The economic downturn in Germany, as indicated by the ZEW index, was particularly severe in August, making it the second time in less than a year that expectations have plummeted to such low levels. The current situation assessment for Germany also deteriorated significantly during this period.
