ZEW Indicator of Economic Sentiment: Stabilization of Optimistic Expectations


The ZEW Indicator of Economic Sentiment derived from the ZEW Financial Market Survey shows signs of stabilization in the positive range. It is currently standing at +9.8 points compared to +13.7 points in the September survey. However, it has increased slightly (+1.8 points) in comparison with the share of last month's results that were given after September 11th.

Thus, the sharp decline in economic sentiment that some market participants expected can not be verified as of now. Accordingly, the German economy can be expected to recover in the beginning of next year.

In October 316 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 the future economic development in Germany within a timeframe of six months.

The expectations for short-term interest rates in the Eurozone have remained unchanged since September. 84 percent of the polled analysts anticipate a further cut in interest rates by the European Central Bank.


Dr. Felix Hüfner, E-mail: huefner@zew.de