ZEW Indicator of Economic Sentiment: Good Prospects for 2004

Research

The ZEW Indicator of Economic Sentiment for Germany increased considerably in December. The indicator now stands at +73.4 points compared with +67.2 points in November.

"The financial analysts' expectations reflect their undiminished optimism. Now it is important that thorough reforms are realized," said ZEW president Prof. Dr. Dr. h.c. mult. Wolfgang Franz. These optimistic expectations are supported by fundamental factors such as the strong increase in incoming orders in Germany and the robust US-economy. For this reason the stronger euro is currently of minor importance.

The experts' evaluation of Germany's economic situation was also slightly less pessimistic this month. 83.7 percent compared to 87.5 percent of those interviewed in the previous month felt that the current economic situation was bad.

Economic sentiment for the euro-zone improved in December as well. The indicator gained +6.1 percent compared with last month's figures and now stands at +78.2 points. In total, economic sentiment continues to be slightly more optimistic for the euro-zone than for Germany.

316 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-range 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

David Lahl, E-mail: lahl@zew.de

Dr. Friedrich Heinemann, Phone: +49 621 1235-149, E-mail: heinemann@zew.de