Economic Expectations Remain Almost Unchanged. The ZEW Indicator of Economic Sentiment Stands at Minus 55.3 Points

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The ZEW Indicator of Economic Sentiment for Germany decreases slightly by 1.5 points to a value of minus 55.3 points in the current August 2022 survey.

The assessment of the economic situation in Germany also decreased and currently stands at minus 47.6 points, 1.8 points lower than in the previous month. Both the assessment of the economic situation and the expectations remain thus almost at the same level as in the July survey.

The ZEW Economic Expectations decrease again slightly in August after a sharp drop in the previous month. The financial market experts therefore expect a further decline in the already weak economic growth in Germany.

The still high inflation rates and the expected additional costs for heating and energy lead to a decrease in profit expectations for the private consumption sector.

In contrast, the expectations for the financial sector are improving due to the supposed further increase in short-term interest rates”, comments Dr. Michael Schröder, researcher at ZEW and head of the ZEW financial market survey, on current results.

The financial market experts’ sentiment concerning the economic development of the eurozone fell 3.8 points in August and currently stands at minus 54.9 points. The situation indicator increased by 2.4 points to a new level of minus 42.0 points.

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Inflation expectations for the eurozone rose by 2.1 points in the current survey. With a value of minus 23.5 points, the indicator remains clearly in negative territory, indicating a reduction of the high inflation rates within the next six months.

Based on the ZEW Financial Market Test, up to 300 experts from banks, insurance companies and financial departments of selected corporations have been interviewed about their assessments and forecasts for important international financial market data every month since 1991.

Participants are asked about their six-months expectations concerning the economy, inflation rates, interest rates, stock markets and exchange rates in the Eurozone, Germany, Japan, United States, United Kingdom, France and Italy as well as their expectations concerning the oil price.

One indicator is created and published from the results of the ZEW Financial Market Survey: The ZEW Indicator of Economic Sentiment is a leading indicator for the German economy similar to the ifo Index.