Germany ZEW Economic Confidence Weakest Since 2011

Germany’s economic confidence hit its lowest since late 2011 in July, dampened by concerns about energy supply, the looming interest rate hike and the pandemic-related restrictions in China, survey results from the ZEW – Leibniz Centre for European Economic Research showed on Tuesday.

The ZEW Indicator of Economic Sentiment slumped 25.8 points to -53.8 in July, while the score was expected to fall moderately to -38.3 from -28.0 in June. A similar weak reading was last reported in December 2011.

The current situation index plunged 18.2 points to -45.8 in July and remained below economists’ forecast of -34.5.

The assessment of the economic situation as well as the expectations reached slightly below the values recorded in March 2020 at the beginning of the COVID-19 crisis.

“Expectations for energy-intensive and export-oriented sectors of the economy have fallen particularly sharply, and private consumption is also assessed as significantly weaker,” ZEW President Achim Wambach said on current expectations.

The financial market experts’ sentiment concerning the economic development of the eurozone also declined sharply in July, with the index easing 23.1 points to -51.1 points. The situation indicator fell to a new level of -44.4 points, dropping 18.0 points compared to June.

Further, the survey showed that inflation expectations for the eurozone rose 6.8 points in the current survey. With a value of minus 25.6 points, the indicator remained clearly in negative territory.

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