Outlook Worsens

The ZEW Indicator of Economic Sentiment for Germany decreased in the current December 2021 survey, falling 1.8 points to a new reading of 29.9 points. The assessment of the economic situation in Germany has worsened again in the current survey. The corresponding indicator dropped 19.9 points to a level of minus 7.4 points. This is the first time since June 2021 that the situation indicator has been in negative territory again. Compared to the previous month, the outlook for economic development in the next six months has deteriorated considerably.

“The German economy is suffering noticeably from the latest developments in the COVID-19 pandemic. Persisting supply bottlenecks are weighing on production and retail trade. The decline in economic expectations shows that hopes for much stronger growth in the next six months are fading. Especially the earnings expectations of export-oriented and consumer-related industries are assessed more negatively,” comments ZEW President Professor Achim Wambach on current expectations.

The financial market experts’ sentiment concerning the economic development of the eurozone increased slightly by 0.9 points in December and currently stands at 26.8 points. The situation indicator fell to a new level of minus 2.3 points, dropping 13.9 points compared to November 2021.

Inflation expectations for the eurozone continued to decline very sharply in the current survey. The indicator currently stands at minus 33.3 points, which corresponds to a decrease of 19.0 points compared with the November result. 54.6 per cent of the experts expect the inflation rate to decline in the next six months.

More information and studies on the ZEW Indicator of Economic Sentiment and the release dates 2022 (as PDF file, 28 KB) and the historical time series (as Excel file, 81 KB)

More about Achim Wambach on Twitter: @AchimWambach