Eurozone: ZEW Indicator of Economic Sentiment fell sharply in August

The Centre for European Economic Research (ZEW) said, the Indicator of Economic Sentiment for Germany once again decreased sharply in August 2019. Expectations are now at -44.1 points. This corresponds to a drop of 19.6 points compared to the previous month. The indicator’s long-term average is 21.6 points. The ZEW Indicator of Economic Sentiment is therefore at its lowest level since December 2011. Over the same period, the assessment of the economic situation in Germany worsened considerably by 12.4 points, with the corresponding indicator falling to a current reading of minus 13.5 points in August.

“The ZEW Indicator of Economic Sentiment points to a significant deterioration in the outlook for the German economy. The most recent escalation in the trade dispute between the US and China, the risk of competitive devaluations, and the increased likelihood of a no-deal Brexit place additional pressure on the already weak economic growth. This will most likely put a further strain on the development of German exports and industrial production,” comments ZEW President Professor Achim Wambach.

The financial market experts’ sentiment concerning the economic development of the eurozone also experienced a significant drop, bringing the indicator to a current level of -43.6 points, 23.3 points lower than in the previous month. The indicator for the current economic situation in the eurozone fell 3.9 points to a level of -14.5 points in August.