ZEW Indicator of Economic Sentiment: Upward Trend Unbroken

The ZEW Indicator of Economic Sentiment derived from the ZEW Financial Market Survey has gained 12.7 points in December and is now standing at +25.8.

This is the highest result since September 2000. Thereby the indicator also surpasses its pre-September 11th level for the first time. The opinion that the economic slump in Germany is reaching its end seems to be strengthening.

In December 313 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 is the balance between positive and negative expectations of the future economic development in Germany within a timeframe of six months.

The expected improvement of the economic situation in Germany over the next months is in line with the recent gains in stock markets as well as with the rise in long-term interest rates. Financial markets thus support the ZEW Indicator of Economic Sentiment which has been signalling cautious optimism for the past few months.

Contact

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