Data published by the Leibniz Centre for European Economic Research (ZEW) showed that the indicator of German economic sentiment determined significantly in September, recording a third decline in a row and reaching the lowest level since October 2023. Meanwhile, the assessment of the current economic situation in Germany dropped to its lowest level since May 2020.
According to the report, the indicator of economic sentiment fell to 3.6 points compared to 19.2 points in August. However, the index remains in positive territory for the 11th month in a row. Economists had expected the index to fall to 17.1 points. Meanwhile, the index of the current economic situation fell to -84.5 points from -77.3 points in August.
“The hope for a rapid improvement in the economic situation has abruptly faded. Recent data have indicated a marked decline in economic expectations for Germany. The number of optimists and pessimists is now balanced. Although falling economic expectations for the eurozone indicate an overall increase in pessimism, the drop in expectations for Germany is much greater. Most respondents seem to have already taken the ECB's interest rate decision into account in their expectations," said ZEW President Professor Achim Wambach.
The data also showed that the indicator of economic sentiment in the eurozone fell to 9.3 points from 17.9 points in August. Consensus estimates suggested a decrease to 16.3 points. The indicator of the current economic situation fell by 8.0 points to -40.4 points, and inflation expectations increased by 10.6 points to -28.5 points.