Data published by the Leibniz Centre for European Economic Research (ZEW) showed that the indicator of German economic sentiment dropped sharply in November, which was caused by Donald Trump's election victory and the collapse of the German government coalition. Assessments of the current economic situation in Germany are also increasingly pessimistic.
According to the report, the indicator of economic sentiment fell to 7.4 points compared to 13.1 points in October. However, the index remains in positive territory for the 13th month in a row. Economists had expected the index to fall to 12.8 points. Meanwhile, the index of the current economic situation fell to -91.4 points from -86.9 points in October.
“Economic expectations for Germany have been overshadowed by Trump’s victory and the collapse of the German government coalition. In the current survey, economic sentiment has declined – and the outcome of the US presidential election is likely to be the main reason for this. Overall, what we’re currently observing is a very dynamic development of economic expectations,” said ZEW President Professor Achim Wambach.
The data also showed that the indicator of economic sentiment in the eurozone fell to 12.5 points from 20.1 points in October. Consensus estimates suggested an increase to 20.5 points. The indicator of the current economic situation fell by 3.0 points to -43.8 points, and inflation expectations increased by 7.5 points to -13.4 points.