Economic Expectations Fall Again

The ZEW Indicator of Economic Sentiment for Germany decreased in the current August 2021 survey, falling 22.9 points to a new reading of 40.4 points compared to July. This is the third time since May that the indicator has dropped, this time even somewhat stronger than in the previous month. The assessment of the economic situation in Germany improved in August, and currently stands at 29.3 points, 7.4 points higher than in July.

“Expectations have declined for the third time in a row. This points to increasing risks for the German economy, such as from a possible fourth COVID-19 wave starting in autumn or a slowdown in growth in China. The clear improvement in the assessment of the economic situation, which has been ongoing for months, shows that expectations are also weakening due to the higher growth already achieved,” comments ZEW President Professor Achim Wambach on current expectations.

The financial market experts’ sentiment concerning the economic development of the eurozone also decreased for the third consecutive time, bringing the indicator to a current level of 42.7 points in August, 18.5 points lower than in the previous month. The indicator for the current economic situation in the eurozone climbed 8.6 points to a level of 14.6 points compared to July.

Inflation expectations for the eurozone fell by 27.4 points in parallel with the decline in economic expectations. The inflation indicator currently stands at 42.2 points.

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