ZEW Indicator of Economic Sentiment weaker than expected in July

The expectations index collected by the Center for European Economic Research (ZEW) fell to minus 53.8 (June: minus 28.0) points, as the ZEW announced. Economists surveyed by Dow Jones Newswires had expected the ZEW index to fall to minus 41.0 points. The index for assessing the economic situation fell to minus 45.8 (minus 27.6) points. Economists had only forecast minus 34.0 points.

“The current major concerns about the energy supply in Germany, the interest rate hike announced by the ECB and other corona-related restrictions in China are leading to a significant deterioration in the economic outlook,” explained ZEW President Achim Wambach. The experts assessed the current economic situation as significantly worse than in the previous month and further lowered their already unfavorable forecast for the next six months.

According to Wambach, the expectations for energy-intensive and export-oriented economic sectors fell particularly sharply, but private consumption was also estimated to be significantly weaker.

The economic expectations for the euro zone fell to minus 51.1 (minus 28.0) points. The indicator for the current economic situation to minus 44.4 (minus 26.4). The inflation expectations for the euro zone rose to minus 25.6 (minus 32.4) points.

By Hans Bentzien

FRANKFURT (Dow Jones)

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