Subdued Economic Outlook Following the Announced EU–US Trade Deal

After increasing for several consecutive months, the ZEW Indicator of Economic Sentiment in Germany decreases markedly in August 2025. At plus 34.7 points, the indicator is minus 18.0 points below the previous month’s reading. The assessment of the current economic situation has also deteriorated. The situation indicator for Germany settles at minus 68.6 points and is thus minus 9.1 points below the reading recorded in the previous month.

“Financial market experts are disappointed from the announced EU–US trade deal. In August 2025, the ZEW indicator experiences a substantial decline, also due to the poor performance of the German economy in the second quarter of 2025. The outlook has worsened in particular for the chemical and pharmaceutical industries. The mechanical engineering and metal sectors as well as the automotive industry are also severely affected,” comments ZEW President Professor Achim Wambach, PhD on the survey results.

Although initial growth estimates for the eurozone were better than those for Germany in the second quarter of 2025, these expectations have also been revised downwards for the monetary union and are currently at plus 25.1 points – minus 11.0 points below the previous month’s reading. The assessment of the current economic situation has deteriorated, too, with the situation indicator declining by minus 7.0 points compared to the previous month and settling at minus 31.2 points.