| Consensus | Consensus Range | Actual | Previous | |
| Current Conditions | -69.9 | -77.0 to -68.0 | -61.1 | -77.6 |
| Economic Sentiment | 30.0 | 21.5 to 30.0 | 34.2 | 26.3 |
Highlights
Germany’s economic outlook improved markedly in August, signalling growing confidence that economic conditions may strengthen despite persistent underlying weakness. The indicator of economic sentiment rose by 7.9 points to 34.2, while the current-situation indicator improved substantially by 16.5 points. Nevertheless, its deeply negative reading of minus 61.1 suggests that stronger expectations have yet to translate into a broad-based improvement in present economic activity.
The recovery in confidence appears increasingly broad-based, supported by favourable corporate results, stronger exports and government infrastructure investment. Particularly encouraging is the 22.2-point improvement in automotive-sector expectations, although sentiment remains negative, indicating continued structural pressures. Chemical, pharmaceutical, engineering and metals industries also recorded notable gains. Consumer expectations strengthened but remained below zero, while construction moved marginally into positive territory.
The eurozone displayed a similar pattern, with sentiment rising to 31.4, alongside a sharp improvement in current-condition assessments. In summary, the figures suggest strengthening recovery expectations across Germany and the eurozone, but considerable distance remains between improving confidence and actual economic conditions. These latest updates take the RPi to 8 and the RPI-P to 9, meaning that economic activities continue to stay within the expectations of the German economy.
Market Consensus Before Announcement
Current conditions expected to continue recovering to -69.6 in August from minus 77.6 in July. Economic sentiment seen at 30.0 versus 26.3 in July.
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.