Economic Outlook Worsens Once More

The ZEW Indicator of Economic Sentiment for Germany recorded a decrease of 8.6 points in July 2018 and now stands at minus 24.7 points. This is the lowest reading since August 2012 and well below the long-term average of 23.2 points. Since the beginning of the year, expectations have sunk by a considerable 45.1 points. The assessment of the current economic situation in Germany decreased by 8.2 points, leaving the corresponding indicator at 72.4 points.

“The current survey period has been marked by great political uncertainty. In particular, fears over an escalation of the international trade war with the United States have dampened the economic outlook. The positive news regarding industrial production, incoming orders and the labour market have been greatly overshadowed by the anticipated negative effects on foreign trade,” comments ZEW President Professor Achim Wambach.

The financial market experts’ sentiment concerning the economic development of the Eurozone also experienced a significant drop, with the corresponding indicator currently standing at minus 18.7 points, 6.1 points below the reading from the previous month. Meanwhile, the indicator for the current economic situation in the Eurozone has sunk by 3.7 points to a reading of 36.2 points. As a result, the economic outlook for the Eurozone over the coming six months has worsened considerably. In accordance with the weaker economic outlook for both Germany and the Eurozone, inflation expectations also saw a noticeable drop compared to the previous month.

For more information please contact:

Frank Brückbauer, Phone +49 (0)621/1235-148, E-mail frank.brueckbauer@zew.de

Dr. Frederick Eidam, Phone +49 (0)621-1235-330, E-mail frederick.eidam@zew.de

Dr. Michael Schröder, Phone: +49 (0)621/1235-368, E-mail michael.schroeder@zew.de

More information and studies on the ZEW Indicator of Economic Sentiment and the release dates 2018 (as PDF file, 28 KB) and the historical time series (as Excel file, 81 KB)