| Consensus | Actual | Previous | |
|---|---|---|---|
| Current Conditions | -40.0 | -56.5 | -34.8 |
| Economic Sentiment | -14.0 | -8.5 | -10.7 |
Highlights
ZEW's June survey found a further, and sharper than anticipated, deterioration in analysts' assessment of current economic conditions but also a surprise improvement in the outlook.
The current conditions measure was down fully 21.7 points at minus 56.5. This was its steepest drop since the early days of Covid and its weakest reading since January. By contrast, economic sentiment (expectations) rose 2.2 points to minus 8.5, its first increase since February but still the second-lowest print in 2023.
The worsening in current conditions should not be too much of a shock after the latest GDP update which left the German economy in recession. Moreover, the improvement in sentiment is too small to be of any real significance and the latest reading is still well below its 21 long-run average. In other words, the overall picture remains quite grim. That said, with the German ECDI and ECDI-P both standing at 3, economic activity in general is performing much as expected.
The current conditions measure was down fully 21.7 points at minus 56.5. This was its steepest drop since the early days of Covid and its weakest reading since January. By contrast, economic sentiment (expectations) rose 2.2 points to minus 8.5, its first increase since February but still the second-lowest print in 2023.
The worsening in current conditions should not be too much of a shock after the latest GDP update which left the German economy in recession. Moreover, the improvement in sentiment is too small to be of any real significance and the latest reading is still well below its 21 long-run average. In other words, the overall picture remains quite grim. That said, with the German ECDI and ECDI-P both standing at 3, economic activity in general is performing much as expected.
Market Consensus Before Announcement
Current conditions are expected to fall in June to minus 40.0 from May's minus 34.8 . Expectations (economic sentiment) are expected to also fall, to minus 14.0 from May's minus 10.7.
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.
