Data published by the Leibniz Centre for European Economic Research (ZEW) showed that the indicator of German economic sentiment deteriorated markedly in August, recording a second decline in a row and reaching a 7-month low. Meanwhile, the assessment of the current economic situation in Germany has also declined.
According to the report, the indicator of economic sentiment fell to 19.2 points compared to 41.8 points in July. However, the index remains in positive territory for the 10th month in a row. Economists had expected the index to fall to 32.6 points. Meanwhile, the index of the current economic situation fell to -77.3 points (4-month low) from -68.9 points in July.
“The economic outlook for Germany is breaking down, while in August the strongest decline of the economic expectations over the past two years was recorded. Economic expectations for the eurozone, the United States and China are also deteriorating markedly. It is likely that economic expectations are still affected by high uncertainty, which is driven by ambiguous monetary policy, disappointing business data from the US economy and growing concerns over an escalation of the conflict in the Middle East,” said ZEW President Professor Achim Wambach.
The data also showed that the indicator of economic sentiment in the eurozone fell to 17.9 points from 43.7 points in July. The last time the indicator experienced a steeper decline was April 2020. Consensus estimates suggested a decrease to 35.4 points. The indicator of the current economic situation rose by 3.7 points to -32.4 points, and inflation expectations increased by 2.0 points to -39.1 points.