Data published by the Leibniz Centre for European Economic Research (ZEW) showed that the indicator of German economic sentiment rose strongly in October, recording the first increase in the last 4 months and rebounding from the lowest level since October 2023. However, the assessment of the economic situation in Germany continued to worsen.
According to the report, the indicator of economic sentiment rose to 13.1 points compared to 3.6 points in September. The index remains in positive territory for the 12th month in a row. Economists had expected the index to rise to 10.0 points. Meanwhile, the index of the current economic situation fell to -86.9 points from -84.5 points in September, with almost 9 out of 10 respondents assessing the current economic situation as negative.
“The economic sentiment for Germany has risen in the latest survey. The factors contributing to this improvement are the expectation of stable inflation rates and the associated prospect of further interest rate cuts by the ECB. Positive signals are also coming from German export markets. Economic expectations for the eurozone, the United States and China have also improved significantly. The increased optimism about China is probably related to the Chinese government's economic stimulus measures. These events probably also contributed to the growth of economic expectations for Germany," said ZEW President Professor Achim Wambach.
The data also showed that the indicator of economic sentiment in the eurozone rose to 20.1 points (the highest value since July) from 9.3 points in September. Consensus estimates suggested an increase to 16.9 points. The indicator of the current economic situation fell by 0.4 points to -40.8 points, and inflation expectations increased by 7.6 points to -20.9 points.