ZEW Indicator of Economic Sentiment - Pessimism Fades

The ZEW Indicator of Economic Sentiment for Germany rises by a substantial +5.6 points in June. Having reached +13.9 points in May, the indicator's current level of +19.5 points is still far below its historical average of +34.1 points.

The clear increase in business confidence may be due to the sharp depreciation of the euro as well as the hope that necessary reforms will be actively implemented after the autumn elections. "The outlook begins to brighten. The country needs stable majorities to bring forward unpopular, but nevertheless overdue reforms. We cannot afford any further delay", comments ZEW President Prof. Dr. Dr. h.c. mult. Wolfgang Franz.

The experts surveyed express yet again a more pessimistic view of Germany's current economic situation. The indicator of the current economic situation is down from -69.3 points to -70.0 points in June.

Economic expectations for the euro zone increase slightly in June. The indicator gains +1.9 points compared with last month's figures and now stands at +16.7 points. The corresponding indicator for the current economic situation in the euro zone declines from -31.0 to -38.3 points.

315 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