Expectations Drop Significantly Again

The ZEW Indicator of Economic Sentiment for Germany recorded another sharp decline in the current April 2023 survey. At 4.1 points, it is 8.9 points below the previous month’s value. This means that no significant improvement in the economic situation is to be expected in the next six months. In contrast, the assessment of the economic situation in Germany has improved considerably. The corresponding indicator has climbed 14.0 points to a new value of minus 32.5 points. Despite the improvement, the economic situation is still considered relatively negative.

“The financial market experts are still uncertain. The ZEW Indicator of Economic Sentiment has dropped noticeably and currently points to an unchanged economic situation for the next six months. Economic expectations are negatively affected by several factors. Experts expect banks to be more cautious in granting loans. The still high inflation rates and the internationally restrictive monetary policy are also weighing on the economy. On the positive side, the danger of an acute international financial market crisis seems to have been averted: Earnings expectations for banks and insurance companies have improved compared to the previous month and are once again clearly in positive territory,” comments ZEW President Professor Achim Wambach on the survey results.

The financial market experts’ sentiment concerning the economic development of the eurozone also continued to worsen in April and currently stands at 6.4 points, 3.6 points below the previous month’s value. The situation indicator for the eurozone improved significantly, rising 14.4 points to a new reading of minus 30.2 points.