The economic expectations of German analysts have so far been unaffected by the latest stock market decline. The ZEW Indicator of Economic Sentiment for Germany decreased by a slight 0.5 points in July compared with the previous month's result.

It is now standing at 69.1 points and thus still above its historical average of about 34 points. The unusual discrepancy between the ZEW Indicator and stock market performance therefore continues. After increasing significantly in the first months of this year the indicator is now levelling off. As the indicator is leading the real economy by about six months it signals a continued increase of German industrial production in the second half of the year.

In July 325 analysts and institutional investors participated in the ZEW Financial Markets Survey which is conducted monthly by the Centre for European Economic Research (ZEW), Mannheim. The participants were asked about their medium-term expectations concerning economic activity and capital markets. The ZEW Indicator of Economic Sentiment is the balance between positive and negative expectations of future economic activity in Germany within a timeframe of six months.

The assessment of current conditions has improved in July for the second month in a row. While still 72 percent of the surveyed analysts regard the current economic situation as bad, this figure was standing at 87 percent at the beginning of the year.


Dr. Felix Hüfner, E-mail:

Volker Kleff, E-mail:





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