ZEW Financial Market Survey: Economic Expectations Continue to Show Sharp Downward Trend

According to the latest findings of the ZEW Financial Market Survey in November, the economic expectations of German financial analysts have dropped to 8.7 points. This is the lowest level reached since March 1999. The early indicator is therefore continuing to show a drastic downward trend.

In January, the barometer was still rather high at almost 90 points. The assessment of the current economic situation is only slightly worse in November than it was in October.

The ZEW Financial Market Survey is carried out on a monthly basis by the Centre for European Economic Research (ZEW) and includes 400 analysts and institutional investors, who are asked about their medium-term expectations concerning economic activity and capital markets. The ZEW Indicator of Economic Sentiment shows the balance between positive and negative expectations regarding future economic activity in Germany.

The negative trend in terms of economic expectations, however, has improved the outlook for the long-term level of interest rates in November. As a result of diminishing fears of inflation, the majority of institutional investors expect the interest rates on ten-year government bonds to remain stable in the medium-term.

Contact

Dr. Felix Hüfner, E-mail: huefner@zew.de

Birgit Sasse, E-mail: sasse@zew.de