ZEW Indicator of Economic Sentiment - Economic Expectations Brighten up Slightly

The ZEW Indicator of Economic Sentiment for Germany increased by 7.3 points in September 2012. It is now standing at a level of minus 18.2 points. This is the indicator’s first increase after four declines in a row.

The evaluation of the experts’ responses before and after the decision of Germany’s Federal Constitutional Court on the European Stabilisation Mechanism (ESM) showed no significant differences. The negative value of the indicator shows that the financial market experts are still expecting the German economy to lose momentum over the next six months. However, the end of the downward trend in September also reveals that the weakening of the economy will be rather moderate according to the financial market experts’ assessment.

"The European Central Bank’s announcement to purchase government bonds, which is a problematic decision, might nevertheless have contributed to the improvement of the economic sentiment. However, the debt crisis is not solved yet, and the risks for economic activity remain," says ZEW President Prof. Dr. Dr. h.c. mult. Wolfgang Franz.

The assessment of the current economic situation for Germany weakend in September compared to the previous month. The respective indicator has dropped by 5.6 points in September. It now stands at the 12.6 pointsmark. Economic expectations for the Eurozone have improved significantly in September. The corresponding indicator has risen by 17.4 points to minus 3.8 points. The indicator for the current economic situation in the Eurozone has hardly changed (down: 1.2 points). The respective indicator hovers at the minus 76.3 points-mark.

For further information please contact

Dr. Christian D. Dick, E-mail dick@zew.de