Economic expectations in Germany have fallen to their lowest level in two years
The economic expectations of financial experts in Germany fell 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, the institute announced on Tuesday. That was 22.6 points less than in the previous month, when expectations had fallen for the first time in a year. The assessment of the current situation has also deteriorated significantly.
“The economic situation in Germany is deteriorating,” said ZEW President Achim Wambach. A similarly sharp drop in expectations last occurred in July 2022. This was due to “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 USA and China have also fallen significantly. “This particularly affects the expectations of German industry, especially export-oriented companies,” explained Wambach. Expectations for the eurozone were at 17.9 points, after a decline of 25.8 points compared to July.
In the previous month, when expectations fell for the first time in a year, the assessment of the current situation had improved. This time, however, this was not the case. The assessment of the current situation fell by 8.4 points to minus 77.3 points.
The ZEW surveys financial experts from banks, insurance companies and the finance departments of large companies about their assessments of important international financial market data such as inflation rates, interest rates, stock market indices, exchange rates and oil prices in order to gain insights into future economic development. The ZEW index is considered an important indicator of Germany’s future economic development.
The current survey was conducted from August 5 to 12 and included 152 analysts and institutional investors.
The economic downturn in Germany, as indicated by the ZEW index, was particularly severe in August, marking the second collapse in expectations in less than a year. The assessment of the current situation in Germany has also deteriorated significantly during this period.
