Germany: ZEW indicator of economic sentiment unexpectedly worsened in May

According to the report from Centre for European Economic Research (ZEW), the ZEW Indicator of Economic Sentiment for Germany records a decrease of 5.2 points in May 2019, and now stands at minus 2.1 points. Economists had expected an increase to 5 from 3.1 in April. The indicator’s long-term average is 22.1 points.

Over the same period, the assessment of the economic situation in Germany has improved by 2.7 points, with the corresponding indicator climbing to a current reading of 8.2 points. The development of production and exports in Germany as well as Eurostat’s most recent flash estimate of  GDP growth in the euro area in the first quarter of 2019 give rise to the hope that the German economy, too, has grown more strongly than expected in the first quarter.

The financial market experts’ sentiment concerning the economic development of the eurozone also experienced a drop. The corresponding indicator currently stands at minus 1.6 points, 6.1 points below the reading from the previous month. By contrast, the indicator for the current economic situation in the eurozone climbed 6.2 points to a level of minus 7.0 points in May. The economic outlook for the eurozone therefore also remains rather subdued.