| Consensus | Actual | Previous | |
|---|---|---|---|
| Current Conditions | -73.5 | -68.9 | -73.8 |
| Economic Sentiment | 42.7 | 41.8 | 47.5 |
Highlights
The ZEW economic sentiment indicator for Germany experienced its first decline in a year, plummeting by 5.7 points to 41.8 in July. The assessment of Germany's economic situation improved marginally, rising 4.9 points to minus 68.9, despite this decline. This was attributed to the European Central Bank's monetary policy uncertainty, political instability in France, and the unexpectedly weak May exports.
The situation indicator for the Eurozone experienced a minor increase of 2.5 points to minus 36.1, while economic sentiment for the Eurozone decreased by 7.6 points to 43.7. These data indicate that there is a growing sense of pessimism regarding the future of the German economy in the face of persistent obstacles.
The situation indicator for the Eurozone experienced a minor increase of 2.5 points to minus 36.1, while economic sentiment for the Eurozone decreased by 7.6 points to 43.7. These data indicate that there is a growing sense of pessimism regarding the future of the German economy in the face of persistent obstacles.
Market Consensus Before Announcement
Current conditions are expected to hold steady at minus 73.5 in July versus June's minus 73.8 which was sharply lower than expected. By contrast, the report's expectations component (economic sentiment) is seen falling to 42.7 from June's 47.5 which also fell short of the consensus.
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.
