Economic Situation Assessed Much More Positively, While Expectations Decline

The ZEW Indicator of Economic Sentiment for Germany decreased in the current June 2021 survey, falling 4.6 points to a new reading of 79.8 points. By contrast, the assessment of the economic situation in Germany improved very significantly, with the corresponding indicator currently standing at minus 9.1 points, 31.0 points higher than in the previous month. The assessment of the economic situation in Germany is now back to the pre-pandemic level of August 2019. Due to the very high economic expectations, the outlook is now much more positive than in summer 2019.

“The economic recovery is progressing. Although the ZEW Indicator of Economic Sentiment has experienced a drop in June, it remains at a very high level. The decline in expectations is probably largely due to the considerably better assessment of the economic situation, which is now back at pre-crisis levels. The financial market experts therefore continue to expect a strong economic recovery for the next six months,” comments ZEW President Professor Achim Wambach on current expectations.

The financial market experts’ sentiment concerning the economic development of the eurozone also decreased in June, bringing the indicator to a current level of 81.3 points, 2.7 points lower than in the previous month. The indicator for the current economic situation in the eurozone climbed 27.0 points to a level of minus 24.4 points compared to May 2021.

Inflation expectations for the eurozone have risen by 2.0 points to a new value of 79.6 points. Almost 84 per cent of the experts expect the inflation rate in the euro area to increase further in the next six months.

More information and studies on the ZEW Indicator of Economic Sentiment and the release dates 2021 (as PDF file, 28 KB) and the historical time series (as Excel file, 81 KB)

More about Achim Wambach on Twitter: @AchimWambach