ZEW Indicator of Economic Sentiment: Number of Optimists Rises Significantly

The ZEW Indicator of Economic Sentiment derived from the ZEW Financial Market Survey rises to +35.9 points in January. This corresponds to an increase of 10.1 points compared with the December result.

This result reinforces the positive outlook for the German economy that the indicator has been signalling for several months by now. Other leading indicators are now beginning to pick up this trend.

In January 318 analysts and institutional investors participated in the ZEW Financial Markets Survey which is conducted monthly 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 is the balance between positive and negative expectations of the future economic development in Germany within a timeframe of six months.

The majority of analysts (60 percent) expects further rate cuts by the European Central Bank within the first half of this year. This contrasts with the expectations for the US Federal Reserve. 55 percent of survey participants anticipate no change in the Federal Funds Rate in the next months.

Contact

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

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