ZEW Indicator of Economic Sentiment: Sentiment Remains Flat

The downward trend of the ZEW Indicator of Economic Sentiment for Germany has lost momentum in December. The indicator now stands at 0.6 points.

This reflects a slight decline of 3.6 points compared to the previous month. The slight stock market recovery and the

European Central Bank interest rate cut had a positive effect on the indicator. However, the current uncertainty about Germany's politico-economic situation and increased geopolitical risks are responsible for the further deterioration of the indicator. "The tone of the financial markets remains flat and the danger of recession has not vanished yet" - this is how ZEW president Prof. Dr. Wolfgang Franz interprets the indicator.

The gap between expectations for the German and the eurozone economy continues to widen in December. In December, expectations for the eurozone economy reached 27.1 points compared to 24.2 points in November.

In this month 309 analysts and institutional investors participated in the ZEW Financial Markets Survey 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

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

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