ZEW Indicator of Economic Sentiment October 2004 - Increasing Pessimism Among Experts
ResearchThe ZEW Indicator of Economic Sentiment for Germany decreases by 7.1 points in October. The indicator now stands at 31.3 points compared with +38.4 points in September. Hence, it lies below its historical average of +34.7 points.
Thus, the experts assume in their recent six month-forecast a slight slowdown of economic growth. The reason for increased pessimism lies in the oil price which continues to rise sharply, and the expectation that global economic dynamism could slacken. Recently published data on German order inflow and export growth might indicate that demand for German export goods has begun to drop off. Unfortunately, domestic demand in Germany has failed to reinvigorate the economy to date, thus providing no compensation for declining external demand.
This month, experts have a less pessimistic view on the current economic situation. The corresponding indicator rises from -61.5 points to -58.9 points.
Economic expectations for the Euro zone further decline in October. The indicator looses -7.1 points compared with last month's figures and now stands at +37.6 points. The corresponding indicator of the current economic situation increased further from -27.3 points to -26.0 points.
297 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
Volker Kleff, E-mail: kleff@zew.de
Dr. Michael Schröder, Phone: +49 (0)621 1235-140, E-mail: schroeder@zew.de
Dr. Friedrich Heinemann, Phone: +49 (0)621 1235-149, E-mail: heinemann@zew.de