Research
ECB | Inflation | Inflation expectations | Germany | ZEW Financial Market Survey | Financial market experts
The majority of the financial market experts surveyed by ZEW do not expect the ECB to meet its inflation target of two per cent within the next two years.

The eurozone's economic prospects over the coming six months improved considerably in May 2017. However, an end to the European Central Bank's (ECB) expansive monetary policy is still not in sight. In the view of the majority of the 350 financial market experts surveyed regularly by the Mannheim-based Centre for European Economic Research (ZEW) on this issue, the ECB will not reach its inflation target of two per cent for at least the next two years. Only a small fraction of those surveyed thought the ECB was likely to succeed in meeting its target.

ZEW Annual Report
Annual report (company) | Balance sheet | ZEW Annual Report
In 2016, ZEW was able to strengthen its position as an economic research institute with an outstanding international reputation.

In the fiscal year of 2016, the Mannheim Centre for European Economic Research (ZEW) proved it has a competitive edge. Despite the strong national and international competition for third-party funding, the proportion of ZEW funding originating from third-party sources remained on a high, steady level in 2016 at 44 per cent (2015: 46 per cent). 19 per cent of the institute’s financial resources were obtained from research projects for the European Union. Thanks to the successful handover of the ZEW Presidency and the excellent evaluation the institute received from the Leibniz Association in the year of its 25th anniversary, ZEW was able to strengthen its already prominent position as one of the leading economic research institutes in Europe. The founding of the new Research Group “Market Design” demonstrates the traditionally innovative character of ZEW, one of the institute’s distinguishing features.

China Economic Panel
China | Cyclical indicator | Short-term forecast | Greater China | Business survey | China Economic Panel
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
Germany | Cyclical indicator | Business Cycle | Short-term forecast | Business survey | ZEW Indicator of Economic Sentiment
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.

Comment
Tax revenue estimation | Germany | Tax Policy

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, President of the Centre for European Economic Research (ZEW) in Mannheim, comments:

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

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.

Comment
Monetary policy decisions | Interest Rate | Interest rate policy | Monetary Policy | ECB
The ECB sticks to its current extremely expansive monetary policy.

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
ZEW Lunch Debates | Fiscal policy | European Commission | European Fiscal Board
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 Centre for European Economic Research (ZEW), Mannheim, 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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