Expectations Slightly Better, Situation Rated Negatively

The ZEW Indicator of Economic Sentiment for Germany recorded a slight increase in the current August 2023 survey. At minus 12.3 points, it is 2.4 points above the previous month’s value. In contrast, the assessment of the economic situation in Germany worsened considerably. The corresponding indicator fell 11.8 points to a new value of minus 71.3 points. A similarly negative assessment of the German economic situation was last seen in October 2022.

“The ZEW Indicator of Economic Sentiment remains in negative territory, though it shows a slight improvement compared to the previous month. Financial market experts thus anticipate a slight uptick in the economic situation by year-end. However, these heightened expectations need to be viewed in the context of a significantly worsened assessment of the current economic situation in Germany. It’s worth noting that the respondents, by and large, do not anticipate any further interest rate hikes in the eurozone and the United States, and the economic outlook for the USA has seen a significant increase – these factors contribute to the improved expectations for Germany,” comments ZEW President Professor Achim Wambach on the survey results.

The financial market experts’ sentiment concerning the economic development of the eurozone improved significantly in August and currently stands at minus 5.5 points, 6.7 points above the previous month’s value. The situation indicator for the eurozone increased, climbing 2.4 points to a new reading of minus 42.0 points.