ZEW Indicator of Economic Sentiment: Downward Trend of Economic Expectations has Come to a Halt

(PresseBox) ( Mannheim, )
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- ZEW Indicator of Economic Sentiment for Germany
-53.8 points (+1.4 vs. last month)

- ZEW Indicator of Economic Sentiment for the Eurozone
-54.1 points (+5.0 vs. last month)

- Assessment of the current situation in Germany
26.8 points (-7.4 vs. last month)

-Assessment of the current situation in the Eurozone
-44.1 points (-4.3 vs. last month)

The ZEW Indicator of Economic Sentiment for Germany has increased by 1.4 points in December 2011. The indicator now stands at the minus 53.8 level. This slight increase marks the end of a nine-month-lasting downward trend. The current value is below the indicator's historical average of 24.6 points.

The financial market experts' uncertainty due to the debt crisis in the Eurozone has already been reflected by the negative balances of the ZEW Indicator of Economic Sentiment in the previous months. In December the indicator's negative balance still suggests that the economic situation in Germany will weaken over the next six months.

"The economic sentiment for Germany seems to have bottomed out," says ZEW President Prof. Dr. Dr. h.c. mult. Wolfgang Franz. "Apparently, the financial market experts expect the economic activity to slow down, but not to plunge during the next six months. The decisions of the latest EU summit may have improved the experts' expectations. Subject to a consensus on crucial details, these decisions are an important step towards an efficient institutional framework for the currency union."

The assessment of the current economic situation in Germany remains positive but has deteriorated for the fifth time in a row. The corresponding indicator has dropped by 7.4 points to 26.8 points in December.

Economic expectations for the eurozone have increased by 5.0 points in December. The respective indicator now stands at minus 54.1 points. The indicator for the current economic situation in the eurozone has dropped by 4.3 points and now stands at minus 44.1 points.

287 analysts and institutional investors participated in this month's ZEW Financial Markets Survey which is conducted on a monthly basis by the Centre for European Economic Research (ZEW), Mannheim. The participants were asked from November 28th to December 12th, 2011 about their medium-term expectations concerning economic activity and capital markets. The ZEW Indicator of Economic Sentiment shows the balance between positive and negative expectations regarding future economic activity in Germany within a timeframe of six months. The horizontal line indicates the historical mean of the indicator.
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