The ZEW Indicator of Economic Sentiment for Germany fell by 12.2 points in June. Since April, the index has fallen from 62.7 to the current level of +37.8 points, slightly above its historical average of +35.3 points.
Several reasons were cited for the renewed decline of economic expectations: high oil price, the European Central Bank’s expected policy of increasing interest rates, the strong Euro against the US-Dollar and an expectation that the positive effect of premature purchases of consumer goods will peter out within six months.
ZEW Indicator of Economic Sentiment - Downward movement continues
The ZEW Indicator of Economic Sentiment for Germany fell by -12.2 points in June. Compared with +50.0 points in May, the indicator’s current level of +37.8 points is only slightly above its historical average of +35.3 points.
Several reasons are responsible for the renewed decline of economic expectations. The high oil price, the European Central Bank’s expected policy of increasing interest rates and the strong Euro against the US-Dollar are likely to have negatively affected economic expectations. Furthermore, the positive effect of premature purchases of consumer goods is expected to peter out within six months.
“In light of several irritations and undesirable developments in economic policy - such as the anti-discrimination law, the increase of the value-added tax and higher taxes for the rich - the disillusionment of the financial markets experts is continuing. Economic policy should not rest on its laurels, otherwise it will run the risk that there will be a complete change of mood”, said ZEW President Prof. Dr. Dr. h.c. mult. Wolfgang Franz.
Due to the favourable development of exports and industry production, the financial experts surveyed again give a more favourable assessment of the economic situation in Germany. The corresponding indicator is up from +8.7 points to +11.9 points in June.
Economic expectations for the euro zone have also deteriorated in June. The indicator decreased by -10.4 points and now stands at 37.3 points. This month, the corresponding indicator for the current economic situation in the euro zone decreased slightly by -2.8 points to 15.5 points.
Post a Comment