Economic Expectations Are Increasing

The ZEW Indicator of Economic Sentiment for Germany recorded an increase of 6.6 points in December 2018 and now stands at minus 17.5 points. Despite this increase, the indicator is still clearly in negative territory and remains well below the long-term average of 22.5 points. The assessment of the current economic situation in Germany once again decreased considerably in December, with the corresponding indicator falling by 12.9 points to a level of 45.3 points.

“Although the rise in economic expectations is a welcome one, it should not be over-interpreted. The assessment of the economic situation has worsened dramatically for both Germany and the Eurozone. This is indicative of relatively weak economic growth in the fourth quarter. In addition, uncertainties also remain in terms of the looming international trade dispute and Brexit, which have a particularly negative impact on private investment and Germany’s exports,” comments ZEW President Professor Achim Wambach.

The financial market experts’ sentiment concerning the economic development of the Eurozone rose by 1.0 points, leaving the corresponding indicator at a level of minus 21.0 points. By contrast, the assessment of the current economic situation in the Eurozone saw a further decrease in December, with the corresponding indicator falling by 6.1 points compared to the previous month, to a level of 12.1 points. The assessment of the inflation development in the Eurozone also recorded a strong decrease. The corresponding indicator dropped by 19.5 points to a level of 6.0 points.