China Economic Panel
China Economic Panel | Business survey | Greater China | Short-term forecast | Cyclical indicator | China
In May, the CEP Indicator has declined significantly and is now at minus 0.1 points.

According to the current survey for May (2–17 May 2017), the economic outlook for China has declined significantly, falling by 17.8 points (April 2017: 17.7 points). The rather optimistic sentiment witnessed in the previous survey has thus faded somewhat. The CEP Indicator, which reflects the expectations of international financial market experts regarding China’s macroeconomic development over the coming twelve months, is currently at minus 0.1 points, falling below the long-term average of 5.2 points. The assessment of the current economic situation has also dampened and fell by 5.4 points to a current level of 12.2 points.

ZEW Indicator of Economic Sentiment
ZEW Indicator of Economic Sentiment | Business survey | Short-term forecast | Business Cycle | Cyclical indicator | Germany
ZEW Indicator of Economic Sentiment for Germany, May 2017

The ZEW Indicator of Economic Sentiment for Germany continued to increase in May 2017. Compared to the previous month, it climbed by 1.1 points to a current reading of 20.6 points. The long-term average of 23.9 points has not quite been reached yet. The assessment of the current economic situation in Germany also improved once again in May. The indicator climbed by 3.8 points to 83.9 points. Taken together, the assessment of the current situation and the economic sentiment show a positive outlook for the German economic growth in the coming six months. "The latest figures on the gross domestic product confirm that the German economy is in good shape. ZEW indicators have been pointing to this trend for some time. The prospects for the eurozone as a whole are gradually improving, further strengthening the economic environment for German exports," comments ZEW President Professor Achim Wambach.

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Tax Policy | Germany | Tax revenue estimation

The Working Party on "Tax Revenue Estimates" at the German Federal Ministry of Finance has made considerable upward revisions to their estimates of German tax revenues until 2021. According to the Working Party's estimates, annual tax revenues on the federal, state and municipal level are expected to increase from 732 billion euros in 2017 to 852 billion euros in 2021. Compared with previous forecasts, there has been an upward correction of 46 billion euros regarding tax revenues for the period of 2018–2021. This being the case, tax revenues on the municipal and state level are likely to experience stronger growth than federal revenues. Professor Friedrich Heinemann, head of the Research Department "Corporate Taxation and Public Finance" at the Centre for European Economic Research (ZEW), offers his view on the matter.

Comment
Presidential election | France | Europe
A ray of hope for France: The former Economy Minister Emmanuel Macron won the French presidential election.

In the presidential election in France, the French people voted for former Economy Minister Emmanuel Macron. Professor Achim Wambach, PhD, President of the Centre for European Economic Research (ZEW) in Mannheim comments:

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Federal Reserve Bank | Interest rate policy | United States | Interest Rate

As expected, the US Federal Reserve has made no change to the federal funds rate after raising it from 0.75 to 1.0 per cent back in March 2017. What has come to the fore of the debate surrounding monetary policy now is the timing and speed of the Reserve’s efforts to shrink the size of its balance sheet by reducing its stockpile of bonds. Professor Friedrich Heinemann, head of the ZEW Research Department "Corporate Taxation and Public Finance" at the Centre for European Economic Research (ZEW), offers his view on the matter.

Information Economy
Business survey | Germany | Information Services

In the first quarter of 2017 the majority of firms in the information economy are in an optimistic economic mood. This is according to the ZEW sentiment indicator, which currently stands at 66.8 points. This assessment of the economic situation is just as positive as in the fourth quarter of 2016. Economic sentiment is currently at the highest it has been among knowledge-intensive service providers for many years. This is the result of a survey among firms in the German information economy, conducted by the Mannheim Centre for European Economic Research (ZEW) in March 2017.

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ECB | Monetary Policy | Interest rate policy | Interest Rate | Monetary policy decisions

Despite increasing economic and political confidence in the eurozone, the European Central Bank (ECB) is still yet to reach the point of changing its outlook regarding its monetary policy and has continued to suggest that even lower ECB interest rates are on the cards. Professor Friedrich Heinemann, head of the "Corporate Taxation and Public Finance" Research Department at the Mannheim Centre for European Economic Research (ZEW), comments on the ECB's decision.

ZEW Lunch Debate in Brussels
European Fiscal Board | European Commission | Fiscal policy | ZEW Lunch Debates
The European Fiscal Board was set up to advise the EU Commission on fiscal matters.

In the recent past, the credibility of the Stability and Growth Pact (SGP) has increasingly suffered from the European Commission's broad interpretation of SGP regulations. Up until now, political forbearance has prevented sanctions from being imposed according to the rules. The European Fiscal Board (EFB), which was set up by the EU Commission in 2016, offers opportunities for improvement. In cooperation with international research partners, the Mannheim Centre for European Economic Research (ZEW) investigated how the EFB functions and made proposals how to strengthen the EFB in its role as an impartial counterpart to the European Commission. Today, these proposals were presented at the ZEW Lunch Debate entitled "Making the Most of the European Fiscal Board" in Brussels.

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Tax reform | Corporate taxation | United States

The Trump administration has specified first details of their long-announced tax reform. Accordingly, the reform seeks to cut corporate tax rates to 15 per cent, down from 35 per cent. For now, this tax cut will, however, not be combined with a border adjustment tax on all imports. Professor Friedrich Heinemann, head of the "Corporate Taxation and Public Finance" Research Department at the Mannheim Centre for European Economic Research (ZEW), comments on the reform.

China Economic Panel
China Economic Panel | Business survey | Greater China | Short-term forecast | Cyclical indicator | China
In April, the CEP Indicator has once again improved and is now at 17.7 points.

According to the current survey for April (5 April – 19 April 2017), the economic outlook for China has improved by 3.2 points. The CEP Indicator, which reflects the expectations of international financial market experts regarding China’s macroeconomic development over the coming twelve months, is currently at 17.7 points (March 2017: 14.2 points). This is the third consecutive time that the indicator rises. As a result, the CEP Indicator has now significantly exceeded the long-term average of 5.4 points. Due to this development, the highest level recorded since the introduction of the survey (21.4 points in June 2014) seems to be within reach.

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