| Consensus | Actual | Previous | |
|---|---|---|---|
| Current Conditions | -82.0 | -80.5 | -81.7 |
| Economic Sentiment | 21.0 | 31.7 | 19.9 |
Highlights
ZEW's March survey found analysts becoming a little less pessimistic about the current state of the German economy and notably more upbeat about the outlook. The results were on the strong side of the market consensus.
The current conditions index rose 1.2 points to minus 80.5. However, this was only its first increase since December and still made for its second weakest mark since August 2020. Indeed, the latest print was nearly 65 points short of its pre-Covid mark. However, economic sentiment (expectations) again improved sharply. An 11.8 point jump to 31.7 was the eighth increase in as many months and the steepest of the sequence. The latest level was the highest since February 2022.
Analysts are becoming increasingly confident about recovery prospects for the German economy, reinforced no doubt by expectations for further falls in inflation and, as a result, a cut in ECB interest rates next quarter. That said, today's results also suggest that GDP is seen contracting again this quarter. The March survey lifts the German RPI to 10 and the RPI-P to 15, both readings showing economic activity in general running just a little ahead of forecasts.
The current conditions index rose 1.2 points to minus 80.5. However, this was only its first increase since December and still made for its second weakest mark since August 2020. Indeed, the latest print was nearly 65 points short of its pre-Covid mark. However, economic sentiment (expectations) again improved sharply. An 11.8 point jump to 31.7 was the eighth increase in as many months and the steepest of the sequence. The latest level was the highest since February 2022.
Analysts are becoming increasingly confident about recovery prospects for the German economy, reinforced no doubt by expectations for further falls in inflation and, as a result, a cut in ECB interest rates next quarter. That said, today's results also suggest that GDP is seen contracting again this quarter. The March survey lifts the German RPI to 10 and the RPI-P to 15, both readings showing economic activity in general running just a little ahead of forecasts.
Market Consensus Before Announcement
Expectations (economic sentiment) are expected to rise to 21.0 in March versus February's 19.9 which, for the seventh month in a row, was higher than expected.
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.
