ZEW Indicator of Economic Sentiment - Expectations Stabilise

The ZEW Indicator of Economic Sentiment for Germany slightly increases in October. Standing at +39.4 points versus +38.6 points in September, the indicator remains above its historical average of +34.3 points.

The stabilisation of the indicator may be due to a number of contradictory factors. Somewhat lower oil prices and the world economy's sustained robust growth had a positive impact. Ongoing uncertainty about economic policy under the new government, on the other hand, has a negative impact on growth prospects. Experts appear to fear that the speed of political reforms will slow down and that there will be no majority for important reform programs.

The experts' evaluation of the current economic situation in Germany has not changed significantly. The corresponding indicator increases from -58.1 to -58.0 points.

Economic expectations for the euro zone increase in October. The euro indicator rises by +2.9 points compared with last month's value and now stands at +34.7 points. The corresponding indicator for the current economic situation in the euro zone declines slightly and now stands at -26.9 points.

324 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. The solid line indicates the historical mean of the indicator.

Contact

Volker Kleff, E-mail: kleff@zew.de

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