ZEW Indicator of Economic Sentiment: Risks for the Economic Recovery

In September the ZEW Indicator of Economic Sentiment for Germany is declining for the third consecutive month. It is now standing at 39.5 points which corresponds to a decrease of 3.9 points compared with the previous month's result.

"There is still no sign of the much hoped for upswing in the economy in the next year - the risks for a renewed downturn have increased", this is how ZEW president Prof. Dr. Wolfgang Franz interprets the results. The bad sentiment on financial markets and the continued fall in equitiy prices signal pessimism for future economic activity. Moreover, worries about the high oil price support the negative assessment of the analysts.

In September 301 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 shows the balance between positive and negative expectations regarding future economic activity in Germany within a timeframe of six months.

Expectations for the eurozone economy decreased by 4.6 points in September. However, with an index value of 43.0 points they are still higher than the expectations for Germany.

Contact

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

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