Assessment of the Economic Situation and Expectations Worsen

ZEW Indicator of Economic Sentiment

The ZEW Indicator of Economic Sentiment Stands at 22.3 Points

The ZEW Indicator of Economic Sentiment for Germany decreased in the current October 2021 survey, falling 4.2 points to a new reading of 22.3 points compared to September. This is the fifth time in a row that the indicator has experienced a fall. The assessment of the economic situation in Germany has worsened in the current survey, and currently stands at 21.6 points, 10.3 points lower than in the previous month. This is the first time that the indicator has recorded a decline after its continuous increase between February and September 2021. Compared to the previous month, the outlook for the economic development in the next six months has noticeably deteriorated.

ZEW Index

“The economic outlook for the German economy has dimmed noticeably. The further decline of the ZEW Indicator of Economic Sentiment is mainly due to the persisting supply bottlenecks for raw materials and intermediate products. The financial market experts expect profits to go down, especially in export-oriented sectors such as vehicle manufacturing and chemicals/pharmaceuticals,” comments ZEW President Professor Achim Wambach on current expectations.

The financial market experts’ sentiment concerning the economic development of the eurozone also decreased for the fifth consecutive time, bringing the indicator to a current level of 21.0 points, 10.1 points lower than in the previous month. The indicator for the current economic situation in the eurozone fell 6.6 points to a level of 15.9 points compared to September.

Inflation expectations for the eurozone fell slightly. The inflation indicator stands at 17.1 points in October, 3.0 points lower than in the previous month. However, 49.1 per cent of the experts still expect the inflation rate to rise further in the next six months.

More information and studies on the ZEW Indicator of Economic Sentiment and the release dates 2021 (as PDF file, 28 KB) and the historical time series (as Excel file, 81 KB)

More about Achim Wambach on Twitter: @AchimWambach