Germany's ZEW index, which reflects investors' and analysts' expectations and is designed to predict economic developments in the next six months, fell for the second time in a row and significantly more than expected.
This month, compared to July, the mentioned indicator shrank from 41.8 to even 19.2 values, while it was expected that it would only drop to an average level of 32.6. This is the lowest value in the last seven months and the biggest monthly drop since July 2022.
Meanwhile, the negative value of the ZEW index, which assesses the current situation in Germany, increased this month compared to the previous one, ie from 68.9 to 77.3, which is the lowest level in four months.
The analogous ZEW index of the euro zone, which reflects the expectations of investors and analysts in this zone, contracted from 43.7 to 17.9 levels during the eighth month of this year. The market expected it to fall much less, ie to the value of 35.4. This is its biggest drop in one month since April 2020.
"Germany's economic outlook is deteriorating. In the current survey, we observe the largest decline in economic expectations in the last two years. Economic expectations for the Eurozone, the US and China are also noticeably deteriorating. As a result, expectations for intensive export in the German sector are especially decreasing. Economic expectations are likely to remain subject to significant uncertainty, driven by ambiguous monetary policy, disappointing business data from the US economy and growing concerns about an escalation of the conflict in the Middle East. Very recently, this uncertainty expressed confusion in the international stock markets" – ZEW President Professor Achim Wambach, PhD, comments on the results of the study.
