ZEW Indicator of Economic Sentiment - Slight Decrease

The ZEW Indicator of Economic Sentiment for Germany drops by 7.2 points in August 2010. The indicator now stands at 14.0 points after 21.2 points in the previous month. This value is below the indicator’s historical average of 27.3 points.

The German economy developed very dynamically in the second quarter of the current year. This is documented by the latest GDP growth estimates and by corporate data from the current reporting period. The current decrease of the economic sentiment indicates that the enormous growth observed in the second quarter is unlikely to continue. Due to Germany’s dependence on exports, major risks for economic growth arise from a weak development abroad, e.g. in the euro zone and the United States.

"Given that economic growth worldwide looses momentum, the euphoria about the growth rates in some branches makes financial market experts feel uneasy. Anyway, high growth rates are always easier to realise from a low base level, though with decreasing dynamics", says ZEW President Prof.

Dr. Dr. h.c. mult. Wolfgang Franz.

Once again, the assessment of the current economic situation in Germany improves considerably compared to the previous month. In August the corresponding indicator rises by 29.7 points to 44.3 points. The economic expectations for the euro zone rise by 5.1 points in August. The respective indicator now stands at 15.8 points. The indicator for the current economic situation in the euro zone improves by 13.5 points and now stands at minus 13.0 points.

For further information please contact

Dr. Christian David Dick, E-mail: dick@zew.de

Frieder Mokinski, Phone: +49 (0)621/1235-143,  E-mail: mokinski@zew.de