ZEW Index Continues to Deteriorate

After the economic expectations plummeted in March, they continue to fall in April. At minus 17.2 points, they are minus 16.7 points below the previous month’s reading. The assessment of the current economic situation declines as well, with the situation indicator for Germany hitting minus 73.7 points, which means it is minus 10.8 points below the reading of the previous month.

“Economic expectations are slipping into negative territory. The economic consequences of the Iran war for the German economy go far beyond price increases: Businesses are concerned about long-term shortages of energy supply, and this discourages investment and weakens the effect of government stimuli,” comments ZEW President Professor Achim Wambach, PhD on the current survey results.

As in the previous month, expectations about the industrial sectors are impacted by the Iran war. The expectations for the automotive sector remain largely stable (at minus 44.2 points), whereas the prospects for the chemical and pharmaceutical industries (minus 11 points compared to March) as well as for the steel and metal production (minus 21 points compared to March) deteriorate strongly. Economic expectations for the construction industry turn negative, reading at minus 3.8 points.

The expectations for the eurozone also decline strongly in April. The index is minus 11.9 points lower than in March and is at minus 20.4 points. The assessment of the economic situation deteriorates; at minus 43 points the index falls below the previous month’s reading by minus 13.1 points.