ZEW Indicator of Economic Sentiment - Expectations Slightly Diminished

The ZEW Indicator of Economic Sentiment for Germany has dropped slightly by 2.9 points in October 2010. The indicator now stands at minus 7.2 points after minus 4.3 points in the previous month. This value is below the indicator’s historical average of 27.0 points.

In this context, it should be noted that the assessment of the current economic situation in Germany has once again improved considerably compared to the previous month. The corresponding indicator has climbed by 12.7 points to 72.6 points.

As a fact, recent figures on industrial production and incoming orders prove that German economic growth remains robust. During the last months the German economy has recovered from the financial crisis with exceptional growth rates. The repeated decline of economic sentiment in October indicates that compared to the period of rapid recovery economic growth is likely to slow down in the next six months. More than half of the financial market experts expect no change of the economic situation in Germany within the next half year. Nevertheless, weak economic dynamics in the United States and in some countries of the eurozone remain major risks.

The economic expectations for the eurozone have dropped by 2.6 points in October. The respective indicator now stands at 1.8 points. The indicator for the current economic situation in the eurozone has improved by 5.2 points and now stands at minus 1.1 points.

For further information please contact

Dr. Christian David Dick, E-mail: dick@zew.de

Frieder Mokinski, Phone: +49 (0)621/1235-143, E-mail: mokinski@zew.de