Economic Upswing Continues – Situation As-sessment in Positive Territory for the First Time in Two Years

The ZEW Indicator of Economic Sentiment for Germany decreased in the current July 2021 survey, falling 16.5 points to a new reading of 63.3 points. However, expectations for the next six months still remain at a very high level. The assessment of the economic situation in Germany once again improved strongly and stands at 21.9 points in July, 31.0 points higher than in the previous month. The economic situation in Germany is now rated similarly to how it was at the beginning of 2019, with the corresponding indicator now being back in positive territory for the first time in two years.

“The economic development continues to normalise. In the meantime, the situation indicator for Germany has clearly overcome the coronavirus-related decline. Although the ZEW Indicator of Economic Sentiment has once again fallen significantly, it is still at a very high level. The financial market experts therefore expect the overall economic situation to be extraordinarily positive in the coming six months,” comments ZEW President Professor Achim Wambach on current expectations.

The financial market experts’ sentiment concerning the economic development of the eurozone also recorded a decrease in the July survey, falling to a new reading of 61.2 points. This corresponds to a drop of 20.1 points compared to the previous month.

The situation indicator reached a new level of 6.0 points, climbing 30.4 points compared to June 2021.

Inflation expectations for the eurozone dropped by 10.0 points. However, more than 75 per cent of the experts still expect inflation in the euro area to rise 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