ZEW Indicator of Economic Sentiment March 2005 - Experts Cautiously Optimistic

The ZEW Indicator of Economic Sentiment for Germany improved slightly by +0.4 points in March. At its current level of +36.3 points compared with +35.9 points in February the indicator continues to lie approximately at its historical average of +34.5 points.

Business climate expectations were almost certainly positively influenced by the encouraging figures for incoming orders and an impressive increase in German exports. Negative factors are the euro exchange rate, which is currently challenging its last year's high, and the oil price, which has risen markedly over the survey period. All in all, economic expectations have therefore hardly changed this month. "Without new reforms, economic uncertainty is likely to continue during the months ahead. Which is why it is all the more important that persuasive signals are sent out from the top-level talks with the German Chancellor if the reform process is to gain momentum", comments ZEW President Prof. Dr. Dr. h.c. mult. Wolfgang Franz.

The current economic situation in Germany is judged much less favorably by experts this month. The indicator of the current economic situation declined from -58.7 to -66.0 points in March.

Economic expectations for the euro zone have improved moderately in March. The indicator picked up +1.3 points compared with last month's figures and now stands at +37.3 points. The corresponding indicator for the current economic situation in the euro zone deteriorated from -23.7 to -27.8 points.

Contact

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

Dr. Sandra Schmidt, E-mail: s.schmidt@zew.de