The ZEW Indicator of Economic Sentiment for Germany increased to +17.7 points in March. This corresponds to a rise of +2.7 points compared with the previous month. The indicator thus signals cautious optimism for the second half of 2003.
The expectation of a war in Iraq and the continued decline on stock markets continue to weigh on the prospects for the German economy. However, a separate analysis of different parts of the survey period (March 3 to 17) shows that the interest rate cut by the European Central Bank had a positive impact on analysts' expectations. Also, the speech by Chancellor Schroeder on March 14 seems to have contributed to the slight increase of the indicator. Expectations for the eurozone economy also improved in March. They rose by +0.9 points and have reached now standing at +29.6 points compared to 28.7 points in February.
313 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 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.
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