| Consensus | Actual | Previous | |
|---|---|---|---|
| Current Conditions | -38.8 | -32.5 | -46.5 |
| Economic Sentiment | 15.1 | 4.1 | 13.0 |
Highlights
ZEW's April survey was again mixed with a surprisingly large improvement in current conditions contrasting with an equally unexpected deterioration in expectations.
The current conditions gauge climbed a solid 14 points to minus 32.5, easily more than reversing March's 1.4 point dip. This was its fifth advance in the last six months and its strongest reading since April last year. However, economic sentiment (expectations) fell a further 8.9 points to 4.1, its lowest point so far in 2023.
The April findings show that analysts continue to revise up their assessment of where the German economy currently stands and earlier talk of negative first quarter GDP growth has all but evaporated. Even so, the downgrading of expectations means that, if correct, 2023 will still be a difficult year for economic activity with worries about inflation and a more cautious bank sector both having a dampening effect. Still, for now at least, with an ECDI of 24 and an ECDI-P of 28, the economy as a whole continues to outperform the forecasters' predictions.
The current conditions gauge climbed a solid 14 points to minus 32.5, easily more than reversing March's 1.4 point dip. This was its fifth advance in the last six months and its strongest reading since April last year. However, economic sentiment (expectations) fell a further 8.9 points to 4.1, its lowest point so far in 2023.
The April findings show that analysts continue to revise up their assessment of where the German economy currently stands and earlier talk of negative first quarter GDP growth has all but evaporated. Even so, the downgrading of expectations means that, if correct, 2023 will still be a difficult year for economic activity with worries about inflation and a more cautious bank sector both having a dampening effect. Still, for now at least, with an ECDI of 24 and an ECDI-P of 28, the economy as a whole continues to outperform the forecasters' predictions.
Market Consensus Before Announcement
Current conditions are expected to rise in April to minus 38.8 versus March's lower-than-expected minus 46.5. Expectations (economic sentiment) are expected to rise 2.1 points following March's steep 15.1 point drop to 13.0.
Definition
The Mannheim-based Centre for European Economic Research (ZEW), asks German financial experts every month for their opinions on current economic conditions and the economic outlook for Germany (as well as other major industrial economies). The responses are synthesised into two simple indices that provide a snapshot of how the economy is seen to be performing.
Description
The ZEW Indicator of Economic Sentiment is calculated from the results of the ZEW Financial Market Survey. The ZEW is followed closely as a precursor and predictor of the Ifo Sentiment Survey and as such is followed closely by market participants. The data are available around mid-month for the current month. The survey provides a measure of analysts' view of current economic conditions as well as a gauge of expectations about the coming six months. The latter measure tends to have the larger market impact and reflects the difference between the share of analysts that are optimistic and the share of analysts that are pessimistic. About 350 financial experts take part in the survey.
