Economic Expecations Defy Inflation

The ZEW Indicator of Economic Sentiment for Germany again recorded a slight increase in the current January 2024 survey. At 15.2 points, it is 2.4 points above the December 2023 value. In contrast, the assessment of the economic situation in Germany has remained virtually unchanged. The corresponding indicator lost 0.2 points and now stands at minus 77.3 points.

“Economic expectations for Germany have improved again. This is because now more than half of the respondents assume that the ECB will make interest rate cuts in the first half of the year. There are even more pronounced shifts in US interest rate expectations. More than two-thirds of the respondents predict interest rate cuts by the US Federal Reserve in the next six months. The rise in inflation in Germany and the eurozone in December thus has no impact on the monetary policy expectations of the respondents,” comments ZEW President Professor Achim Wambach on the survey results.

The financial market experts’ sentiment concerning the economic development of the eurozone experienced a slight decrease in January. At 22.7 points, the indicator fell by 0.3 points compared to December 2023. In contrast, the situation indicator for the eurozone increased, climbing 3.4 points to a new reading of minus 59.3 points.