ZEW Indicator of Economic Sentiment - Expectations Improve

The ZEW Indicator of Economic Sentiment for Germany improved in August 2008 by 8.4 points and now stands at minus 55.5 points after minus 63.9 points in the previous month. This is still well below its historical average of 28.3 points.

The improvement of the economic sentiment signals that there is only limited fear about an economic downturn among the financial market experts. The recent decline of the oil price and the depreciation of the euro versus the US-dollar should have mitigated the concerns about the economic situation in Germany.

"The financial market experts have for good reason not been impressed by the negative Gross Domestic Product (GDP) growth rate in the second quarter of 2008. Overall, they reckon with a weaker, but all in all robust economic development and rightly do not fear a recession", says ZEW President Prof. Dr. Dr. h.c. mult. Wolfgang Franz.

After the recent decline of the GDP, the assessment of the current economic situation in Germany significantly decreased. The corresponding indicator dropped by 26.2 points to minus 9.2 points. The economic expectations for the euro zone improved in August as well. The indicator increased by 8.0 points and now stands at minus 55.7 points. The indicator for the current economic situation in the euro zone decreased by 18.9 points and now stands at minus 22.2 points.

For further information please contact

Dr. Sandra Schmidt, E-mail: s.schmidt@zew.de

Matthias Köhler, E-mail: koehler@zew.de