ZEW indicator surges 39.2 points as Germany's outlook brightens

Meanwhile, the assessment of the current economic situation remained largely unchanged, with the German indicator dipping slightly by 0.8 points to minus 82, still the lowest among all countries surveyed and within the eurozone, as per a report by ZEW.

“Expectations are brightening. The ZEW indicator sees a major improvement in May 2025 and compensates for part of the losses observed in the April survey. With a new government in place, some progress in the tariff disputes and a stabilising inflation rate, optimism has increased,” said professor Achim Wambach, president at ZEW and PhD on the survey results.

In almost all industries, sentiment has improved in the May survey. The outlook has improved for the banking industry and export-intensive sectors such as the automobile and chemical industries, as well as metal, machine and steel production.

The most recent interest rate cut by the European Central Bank (ECB) and anticipated future rate cuts have a positive effect particularly for the construction industry. The respondents also expect domestic demand, which has been subdued lately, to pick up on a six-month horizon and boost the German economy, which is currently stagnating, added the report.

The sentiment concerning the economic development in the eurozone is strongly on the rise as well: increasing by plus 30.1 points, it is currently at 11.6 points and thus in the positive range. The assessment of the current economic situation in the monetary union has also improved, albeit less markedly. At minus 42.4 points it is plus 8.5 points above the April reading.

ALCHEMPro News Desk (SG)