ZEW Indicator of Economic Sentiment - Somewhat Weaker Expectations

The ZEW Indicator of Economic Sentiment for Germany has dropped by 4.5 points in May 2011. The indicator now stands at 3.1 points. This value is below the indicator’s historical average of 26.5 points.

At the same time, the assessment of the current economic situation in Germany has improved once again. The respective indicator has risen by 4.4 to 91.5 points. It has thus reached an all-time high.

The slight decline of the indicator of economic sentiment has to be judged against the  background of the excellent assessment of the current economic situation: in view of the strong growth of German GDP in the first quarter of this year, the financial market experts consider a further increase of the economic momentum to be unlikely. Moreover, mixed signals regarding the state of the U.S. economy as well as a weaker outlook for the Chinese economy might have dampened expectations.

"It came as a surprise that the German economy recovered from the crisis that quickly. This strong dynamic is not going to last undamped. Also, risks, such as the crisis in the eurozone and global economic imbalances, should be recognised," says ZEW President Prof. Dr. Dr. h.c. mult. Wolfgang Franz.

Economic expectations for the eurozone have decreased by 6.1 points in May. The respective indicator now stands at 13.6 points. The indicator for the current economic situation in the eurozone has improved by 8.0 points and now stands at 13.6 points.

For further information please contact

Dr. Christian D. Dick, E-mail dick@zew.de

Frieder Mokinski, Phone +49 621/1235-143, E-mail mokinski@zew.de