Outlook Improves Significantly

The ZEW Indicator of Economic Sentiment for Germany increased in the current May 2021 survey, climbing 13.7 points to a new reading of 84.4 points. This is the highest value so far since the beginning of the COVID-19 pandemic. The last time the indicator had reached a higher level was in February 2000.

The assessment of the economic situation in Germany improved by 8.7 points compared to the previous month, and currently stands at minus 40.1 points. The assessment of the economic situation in Germany thus improved very significantly in May.

“The slowing down of the third COVID-19 wave has made financial market experts even more optimistic. The ZEW Indicator of Economic Sentiment in the May survey has reached its highest level in more than 20 years. The assessment of the economic situation has also improved noticeably. The experts expect a significant economic upswing in the coming six months. The economic outlook for the euro area and the United States has improved considerably as well,” comments ZEW President Professor Achim Wambach on current expectations.

The financial market experts’ sentiment concerning the economic development of the eurozone also increased sharply in May, bringing the indicator to a current level of 84.0 points, 17.7 points higher than in the previous month. The indicator for the current economic situation in the eurozone climbed 14.1 points to a level of minus 51.4 points compared to April. The outlook for economic development in the euro area has thus improved very significantly.

Inflation expectations for the eurozone have risen by 2.5 points to a new value of 77.6 points. The vast majority of experts expect the inflation rate to increase in the next six months.

More information and studies on the ZEW Indicator of Economic Sentiment and the release dates 2021 (as PDF file, 28 KB) and the historical time series (as Excel file, 81 KB)

More about Achim Wambach on Twitter: @AchimWambach