Germany’s indicator of economic sentiment rose sharply in May - ZEW

According to the report from ZEW, in May 2020, the ZEW Indicator of Economic Sentiment for Germany recorded an increase for the second time in a row, and now stands at 51.0 points, 22.8 points higher than in the previous month. Economists had expected an increase to 32.0.

In the current survey, the assessment of the economic situation in Germany, by contrast, continued to decrease slightly, with the corresponding indicator dropping 2.0 points to a new value of minus 93.5 points.

"Optimism is growing that there will be an economic turnaround from summer onwards. This is also reflected in the significant improvement in expectations for the individual sectors. According to the financial market experts surveyed, economic growth is expected to pick up pace again in the fourth quarter of 2020. However, the catching-up process will take a long time. Only in 2022 will economic output return to the level of 2019," comments ZEW President Professor Achim Wambach.

The financial market experts' sentiment concerning the economic development of the eurozone also experienced a considerable increase, with the corresponding indicator climbing 20.8 points to a current level of 46.0 points compared to the previous month. By contrast, the indicator for the current economic situation in the eurozone fell by 1.1 points to a new reading of minus 95.0 points.

The inflation indicator currently stands at minus 18.7 points, signalling that the financial market experts expect inflation to decline further in the coming six months.