ZEW Indicator of Economic Sentiment April 2004 - Optimism Continues to Fade

The ZEW Indicator of Economic Sentiment for Germany continued to drop significantly in April. The indicator now stands at +49.7 points compared with +57.6 points in March.

More and more experts are questioning the sustainability of the economic recovery, even though better job market data from the US now points to sustainable worldwide economic recovery. One reason for the worse evaluation is the most recent economic data from Germany, such as industrial production or incoming order figures. The very weak job market recovery in spring and rising oil prices also contribute to the restrained economic outlook. "Optimism among the financial experts is giving way to realism. Further economic recovery this year is by no means certain yet," comments ZEW President Prof. Dr. Dr. h.c. mult. Wolfgang Franz.

The experts' evaluation of Germany's current economic situation is slightly more optimistic this month. Compared to -72.7 last month, the indicator of the current economic situation rises to -72.5 points in April.

Economic sentiment for the euro zone also deteriorated in April. The indicator lost -5.2 points compared with last month's figures and now stands at +59.1 points. The corresponding indicator of the current economic situation in the euro zone is down by –2.0 points to –54.4 points.

306 analysts and institutional investors participated in this month's ZEW Financial Markets Survey which is conducted on a monthly basis by the Centre for European Economic Research (ZEW), Mannheim. The participants were asked about their medium-range 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 within a timeframe of six months.

Contact

Volker Kleff, E-mail: kleff@zew.de

Dr. Claudia Stirböck, E-mail: stirboeck@zew.de

Dr. Friedrich Heinemann, Phone: +49 (0)621 1235-149, E-mail: heinemann@zew.de