| Consensus | Consensus Range | Actual | Previous | |
| Current Conditions | -78 | -78 to -76 | -77.6 | -81.0 |
| Economic Sentiment | 18 | 7 to 18 | 26.3 | 10.5 |
Highlights
Germany's July 2026 economic sentiment indicator points to strengthening business confidence, suggesting that the economy is gradually emerging from its prolonged period of weakness. The expectations index rose sharply by 15.8 points to 26.3, while the assessment of current conditions improved modestly to minus 77.6, indicating that although present economic conditions remain fragile, confidence in the future is recovering more rapidly. This divergence reflects a forward-looking optimism that reforms and improving economic fundamentals are beginning to restore momentum.
The recovery appears increasingly broad-based. Export-oriented industries and domestic demand are both strengthening, with mechanical engineering and consumer-driven sectors recording notable gains. Improvements in construction and continued progress in the chemical, pharmaceutical and metal industries further suggest that business activity is becoming more diversified. However, the automotive sector remains a significant weak spot, with sentiment deteriorating sharply to minus 46.6, reflecting persistent structural challenges, global competition and uncertainty surrounding industrial transformation.
Across the euro area, rising economic expectations reinforce the prospect of a gradual regional recovery, although current conditions remain subdued. Nonetheless, geopolitical tensions in the Middle East and volatile oil prices continue to represent significant downside risks. Overall, the survey indicates that Germany's recovery is becoming more credible, but its sustainability will depend on sustained domestic demand, export resilience and geopolitical stability.
Market Consensus Before Announcement
Sentiment seen rising to 18 in July from 10.5 in June.
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.