ZEW Indicator of Economic Sentiment: Hopes and Fears

The ZEW Indicator of Economic Sentiment for Germany increased slightly by 1.0 points in February. It now stands at +15.0 points compared to +14.0 points in the previous month. Growth in Germany can thus be expected to remain slow in the second half of the year. "The situation remains unstable, we are shifting between hope and fear," says ZEW president Prof. Dr. Wolfgang Franz.

This view is supported by the recent weak performance of the German stock market. On the other hand, analysts expect an oil price decline and a further interest rate cut by the European Central Bank in the medium term. These are signs that bode well for an economic recovery in Germany. Expectations for the eurozone economy fell by 1.2 points in February and now stand at 28.7 points.

322 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

Dr. Felix Hüfner, E-mail: huefner@zew.de

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