ZEW Indicator Rises despite Germany’s Budget Crisis

The ZEW Indicator of Economic Sentiment for Germany again recorded a slight increase in the current December 2023 survey. At 12.8 points, it is 3.0 points above the previous month’s value. The assessment of the economic situation in Germany has also slightly improved. The corresponding indicator climbed 2.7 points and currently stands at minus 77.1 points.

“Despite the current budget crisis, the assessment of the situation and economic expectations for Germany have once again slightly improved. This is due to the fact that the share of respondents expecting interest rate cuts by the ECB in the medium term has doubled. This, in turn, is good news for the German construction industry, for which we observe significantly more optimistic expectations this month. Likewise, the share of respondents expecting inflation rates to fall further is decreasing,” comments ZEW President Professor Achim Wambach on the survey results.

The financial market experts’ sentiment concerning the economic development of the eurozone experienced another considerable increase in December. At 23.0 points, the indicator rose by 9.2 points compared to November. In contrast, the situation indicator for the eurozone decreased marginally by 0.9 points to a new reading of minus 62.7 points.