Economic Outlook Brightens; Interest Rate Turnaround Expected

The ZEW Indicator of Economic Sentiment for Germany again recorded an increase in the current March 2024 survey. At 31.7 points, it is 11.8 points above the February 2023 value. In contrast, the assessment of the economic situation in Germany has barely changed. The corresponding indicator increased by 1.2 points to a new value of minus 80.5 points.

“Economic expectations for Germany are significantly improving. At the same time, more than 80 per cent of those surveyed anticipate that the ECB will cut interest rates in the next six months. This could explain the more optimistic outlook for the German construction industry. The German export sector benefits from the increased economic expectations for China as well as the expected depreciation of the dollar against the euro. Meanwhile, the assessment of the economic situation remains at a very low level. This development somewhat diminishes the increased economic expectations,” comments ZEW President Professor Achim Wambach on the survey results.

The financial market experts’ sentiment concerning the economic development of the eurozone also experienced a considerable increase in March. At 33.5 points, the indicator rose by 8.5 points compared to February. In contrast, the situation indicator for the eurozone decreased, falling 1.4 points to a new reading of minus 54.8 points.