ZEW Indicator of Economic Sentiment - Economic Expectations and Assessment of Current Situation Slump

The ZEW Indicator of Economic Sentiment for Germany has dropped by 22.5 points in August 2011. The indicator now stands at minus 37.6 points. This value is below the indicator’s historical average of 25.9 points.

The ZEW Indicator of Economic Sentiment for Germany has thus deteriorated considerably in August. The fear of a recession in the United States together with the downgrade of the credit-rating of U.S. bonds has further increased macroeconomic uncertainty. Due to increased macroeconomic uncertainty, the critical development in the euro zone and the disappointing data on German GDP growth in the second quarter 2011 financial market experts are far more sceptical now with respect to future economic growth.

"The scepticism with regard to future economic growth shown by a growing number of financial market experts during the previous months has increased dramatically. Besides, expectations are in line with the pessimism about economic growth prevailing on stock markets," says ZEW President Prof. Dr. Dr. h.c. mult. Wolfgang Franz.

The assessment of the current economic situation in Germany is still positive but has deteriorated considerably in August. The corresponding indicator has dropped by 37.1 points to 53.5 points. Economic expectations for the eurozone have decreased by 33.0 points in August. The respective indicator now stands at minus 40.0 points. The indicator for the current economic situation in the eurozone has dropped by 21.4 points and now stands at minus 19.1 points.

For further information please contact

Dr. Christian D. Dick, E-mail dick@zew.de

Frieder Mokinski, Phone +49 621/1235-143, E-mail mokinski@zew.de