Expectations Rise, Low Point of Situation Indicator Reached?

The ZEW Indicator of Economic Sentiment for Germany recorded a significant increase in the current October 2023 survey. At minus 1.1 points, it is 10.3 points above the previous month’s value. In addition, the assessment of the economic situation in Germany has stabilised. The corresponding indicator slightly fell by 0.5 points and currently stands at minus 79.9 points.

“It seems that we have passed the lowest point. There’s a noticeable uptick in the economic expectations of financial market experts in October 2023. In contrast, the assessment of the current economic situation in Germany has barely changed. The heightened economic expectations are accompanied by the anticipation that inflation rates will decrease further and the fact that now more than three-quarters of respondents anticipate stable short-term interest rates in the eurozone. Negative factors such as the Israel conflict – cited by some respondents as a reason for revising their growth forecasts downward – had only limited impact on the overall more optimistic outlook,” comments ZEW President Professor Achim Wambach on the survey results.

The financial market experts’ sentiment concerning the economic development of the eurozone experienced an increase in October and currently stands at plus 2.3 points, back in the positive range and 11.2 points above the previous month’s value. In contrast, the situation indicator decreased considerably, falling 9.8 points to a new reading of minus 52.4 points. This must be taken into account when assessing the increased expectations.