The ZEW Indicator of Economic Sentiment for Germany increased considerably in July. The indicator gained +20.6 points versus the previous month and now stands at +41.9 points. It is now well above its historical mean of 33 points and signals an economic upswing for the beginning of the next year.

"The indicator suggests that Germany is about to leave the economic trough" comments ZEW president Prof. Dr. Wolfgang Franz. Increasing stock prices, the weaker Euro against the US-dollar and the progress achieved in the reform discussions have contributed to new optimism. The end of the strike in Eastern Germany and the hope for moderate wage settlements may also have had a positive effect on Economic Sentiment.

Economic Sentiment for the eurozone also increased significantly in July, but not as much as for Germany. The index gained 12.5 points compared with last month and now stands at 50.5 points.

311 analysts and institutional investors participated in this month's ZEW Financial Markets Survey which is conducted on a monthly basis 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 shows the balance between positive and negative expectations regarding future economic activity in Germany within a timeframe of six months.

Contact

Volker Kleff, E-mail: kleff@zew.de

David Lahl, E-mail: lahl@zew.de

Date

15.07.2003

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Sabine.Elbert@zew.de