Data published by the Leibniz Centre for European Economic Research (ZEW) showed that the indicator of German economic sentiment rose again in May, exceeding economists' forecasts, and reaching its highest level since February 2022. The assessment of the economic situation has also improved.
According to the report, the indicator of economic sentiment rose to 47.1 points compared to 42.9 points in April. The index remains in positive territory for the seventh month in a row. Economists had expected the index to rise to 44.9 points. Meanwhile, the index of the current economic situation rose to -72.3 points from -79.2 points in April.
“After stronger-than-expected growth in the German economy in the first quarter of 2024, both the assessment of the current situation and economic expectations have become more favorable. Signs of an economic recovery are growing, bolstered by better assessments of the overall eurozone and of China as a key export market. The increased optimism is reflected in particular in the sharp rise in expectations for domestic consumption, followed by the construction and machinery sectors,” said ZEW President Professor Achim Wambach.
The data also showed that the indicator of economic sentiment in the eurozone rose to 47.0 points (the highest value since February 2022) from 43.9 points in April. Consensus estimates suggested a rise to 46.1 points. The indicator of the current economic situation rose to -38.6 points from -48.8 points in April and inflation expectations went up by 3.5 points to -45.6 points.