Economic Outlook Slumps

In March, the ZEW Indicator of Economic Sentiment for Germany plunged by 58.2 points to minus 49.5 points, the largest drop since the survey was started in December 1991. The assessment of the economic situation in Germany has also worsened significantly compared to the previous month, with the corresponding indicator currently standing at minus 43.1 points, 27.4 points lower than in February. This combination of strongly negative values for the indicators of both the economic sentiment and the assessment of the current situation has only been witnessed once – during the financial crisis in autumn of 2008.

“The slump of the ZEW Indicator of Economic Sentiment was to be expected. The economy is on red alert. The financial market experts currently expect to see a decline in real gross domestic product in the first quarter, while also considering a further drop in the second quarter to be very likely. For the whole of 2020, the majority of experts currently expect a decline in real GDP growth of approximately one percentage point as a result of the corona pandemic,” comments ZEW President Professor Achim Wambach.

With a decrease of 59.9 points, financial market experts’ sentiment concerning the economic development of the eurozone worsens just as dramatically as that for Germany. The corresponding indicator currently stands at minus 49.5 points. The indicator for the current economic situation in the eurozone also experienced a sharp fall, dropping 38.2 points to a reading of minus 48.5 points compared to February.

The eurozone, too, has only experienced such a particular constellation of sentiment and assessment of the economic situation during the financial crisis at the end of 2008.

More information and studies on the ZEW Indicator of Economic Sentiment and the release dates 2020 (as PDF file, 28 KB) and the historical time series (as Excel file, 81 KB)