ZEW Indicator of Economic Sentiment - Recovery continues

The ZEW Indicator of Economic Sentiment for Germany increased in January 2009 once again. The indicator rose by 14.2 points and now stands at minus 31.0 points after minus 45.2 points in the previous month. This is still well below its historical average of 26.5 points.

The considerable improvement of the indicator might partly be attributed to the second economic stimulus package of the German government. A separate analysis of the business expectations for particular branches of the economy shows that the surveyed experts reckon with positive effects of the stimulus package especially in the construction sector. Moreover, the ECB policy of lowering interest rates should stabilise the economy.

"The financial analysts share the optimism of recent economic forecasts predicting that economic perspectives should improve from the mid of this year. These expectations have to be seen against the background of the current economic situation which is assessed to have deteriorated further this month. Economic policy can try to mitigate the strength of the economic downturn by currently accepting higher expenditures and lower revenues caused by the economic slowdown. Economic policy should also bring forward investments and tax reforms that improve economic growth perspectives", said ZEW President Prof. Dr. Dr. h.c. mult. Wolfgang Franz.

The assessment of the current economic situation in Germany worsened again in January. The corresponding indicator dropped by 12.6 points to minus 77.1 points.

Economic expectations for the euro zone increased in January by 15.3 points. It now stands at minus 30.8 points. The indicator for the current economic situation in the euro zone decreased by 13.5 points to minus 84.7 points.

Für Rückfragen zum Inhalt

Dr. Sandra Schmidt, E-mail: s.schmidt@zew.de

Matthias Köhler, E-mail: koehler@zew.de