ZEW Indicator of Economic Sentiment August 2004 - Declining Expectations
ResearchThe ZEW Indicator of Economic Sentiment for Germany decreases in August by 3.1 points. The indicator now stands at +45.3 points, compared with +48.4 points in July. In spite of the decline, experts expect a moderate recovery for Germany's economy until the beginning of next year.
August is dominated by negative news for the economy: "The opinions of financial analysts coincide with the fear that Germany's economic recovery could be slowed down due to an increasing uncertainty about both the economic development worldwide and the evolution of the oil price", comments President Prof. Dr. Dr. h.c. mult. Wolfgang Franz. Indeed, the latest U.S. economic figures give rise to the fear that the world economy - and thus export demand in Germany which is still strong - could eventually slow down. Furthermore, the high oil price reduces the purchasing power of consumers and is a burden on domestic demand. Thus, the latter could not be able to compensate the possible drop in export demand.
The experts' evaluation of Germany's current economic situation is less pessimistic this month. The indicator of the current economic situation rises from -69.3 to -65.2 points.
Economic sentiment for the euro zone decreases in August. The indicator loses -3.5 points compared with last month's figures and now stands at +52.0 points. The corresponding indicator of the current economic situation in the euro zone continues to increase, from -40.5 points to -33.5 points.
291 analysts and institutional investors participated in this month's ZEW Financial Markets Survey which is conducted on a monthly basis by the Centre for European Economic Research (ZEW), Mannheim. The participants were asked about their medium-term expectations concerning economic activity and capital markets. The ZEW Indicator of Economic Sentiment shows the balance between positive and negative expectations regarding future economic activity in Germany within a timeframe of six months.
Contact
Volker Kleff, E-mail: kleff@zew.de
Dr. Michael Schröder, Phone: +49 (0)621 1235-140, E-mail: schroeder@zew.de
Dr. Friedrich Heinemann, Phone: +49 (0)621 1235-149, E-mail: heinemann@zew.de