Data published by the Leibniz Centre for European Economic Research (ZEW) showed that the indicator of German economic sentiment declined significantly in July, recording the first drop since July 2023 and reaching a 5-month low. In contrast, the assessment of the economic situation in Germany slightly improved.
According to the report, the indicator of economic sentiment fell to 41.8 points compared to 47.5 points in June. However, the index remains in positive territory for the ninth month in a row. Economists had expected the index to fall to 42.5 points. Meanwhile, the index of the current economic situation rose to -68.9 points from -73.8 points in June.
“For the first time in a year, economic expectations for Germany are falling. This was facilitated by the fact that German exports declined more than expected in May. Political uncertainty in France and a lack of clarity on the ECB's future monetary policy have also put pressure on economic expectations,” said ZEW President Professor Achim Wambach.
The data also showed that the indicator of economic sentiment in the eurozone fell to 43.7 points from 51.3 points in June. Consensus estimates suggested a decrease to 48.1 points. The indicator of the current economic situation rose by 2.5 points to -36.1 points, and inflation expectations fell by 7.2 points to -41.1 points.