Before German Federal Election: Recovery in Sight

The ZEW Indicator of Economic Sentiment for Germany shows a considerable leap in expectations in the February 2025 survey. At 26.0 points, it is currently 15.7 points above the previous month’s value. This was the strongest increase in ZEW indicator for Germany in the past two years. The assessments of the current economic situation have also
improved, albeit only slightly. The corresponding indicator showed a minor increase by 1.9 points and is now at minus 88.5 points.

“Shortly before the day of the federal election, economic expectations have clearly improved in February. This rising optimism is probably due to hopes for a new German government capable of action. Also, after a period of absent demand, private consumption can be expected to gain momentum in the next six months. And the recent move by
the ECB to cut interest rates in response to sluggish economic activity in the Monetary Union is likely to have contributed to the better outlook for the construction industry,” comments ZEW President Achim Wambach, PhD on the recent results.

The financial market experts’ sentiment concerning the economic development in the Eurozone reflects this development: The indicator has risen by 6.2 points and is now at 24.2 points. The assessment of the current economic situation has also taken a positive turn. At minus 45.3 points, it is 8.5 points above the January reading.