| Consensus | Consensus Range | Actual | Previous | |
| Current Conditions | -72 | -74 to -66 | -73.7 | -62.9 |
| Economic Sentiment | -0.8 | -11.3 to 5.0 | -17.2 | -0.5 |
Highlights
Germany's latest economic sentiment expectations index falls to minus 17.2 points, about 1.7 points below the consensus forecast and confirming that forward-looking confidence has not only weakened but has now entered contractionary territory. This deterioration reflects geopolitical risk translating into real economic hesitation. The Iran conflict is reshaping expectations beyond energy prices, raising concerns about sustained supply insecurity. Firms appear to be internalising these risks through delayed investment, thereby muting the intended effects of fiscal stimulus.
The depth of pessimism in the current conditions index (minus 73.7) suggests that Germany's economy is perceived as structurally weak in the present, not just uncertain about the future. Sectoral patterns reinforce this narrative as the automotive sentiment stabilises at low levels, sharp declines in chemicals, pharmaceuticals, and metals indicate broad-based industrial stress, particularly in energy-intensive sectors. Construction slipping into negative expectations further signals weakening domestic demand.
The spill-over into the eurozone, with expectations at minus 20.4, highlights regional contagion of uncertainty. In summary, the latest report points to an economy facing shocks from geopolitical risks and eroding business confidence, raising the risk of prolonged stagnation rather than a short-lived slowdown. These updates take the RPI to minus 2 and the RPI-P to minus 13, meaning that economic activities continue to perform within the expectations of the German economy.
Market Consensus Before Announcement
A distinct decline expected with the energy price shock. The consensus sees current conditions down to minus 72 and sentiment at minus 0.8 in April from minus 62.9 and minus 0.5, respectively, in March.
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.