Economic Expectations Collapse

The ZEW Indicator of Economic Sentiment for Germany slumped by 25.8 points to a value of minus 53.8 points in the current July 2022 survey. The assessment of the economic situation in Germany has also decreased sharply and currently stands at minus 45.8 points, 18.2 points lower than in the previous month. Both the assessment of the economic situation and the expectations are thus even slightly below the values recorded in March 2020 at the beginning of the COVID-19 crisis.

“The current major concerns about the energy supply in Germany, the ECB’s announced interest rate hike and further pandemic-related restrictions in China have led to a considerable deterioration in the economic outlook. The experts assess the current economic situation significantly more negatively than in the previous month and have further lowered their already unfavourable forecast for the next six months. Expectations for energy-intensive and export-oriented sectors of the economy have fallen particularly sharply, and private consumption is also assessed as significantly weaker,” comments ZEW President Professor Achim Wambach on current expectations.

The financial market experts’ sentiment concerning the economic development of the eurozone plunged by 23.1 points in July and currently stands at minus 51.1 points. The situation indicator fell to a new level of minus 44.4 points, dropping 18.0 points compared to June 2022.

Inflation expectations for the eurozone rose by 6.8 points in the current survey. With a value of minus 25.6 points, the indicator remains clearly in negative territory.

More information and studies on the ZEW Indicator of Economic Sentiment and the release dates 2022 (as PDF file, 28 KB) and the historical time series (as Excel file, 81 KB)

More about Achim Wambach on Twitter: @AchimWambach