Biggest drop in ZEW indicator of economic sentiment for Germany in Mar

The ZEW indicator of economic sentiment is a simple sentiment indicator created out of the monthly ZEW Financial Market Survey, which is an aggregation of the sentiments of approximately 350 economists and analysts on the economic future of Germany in the medium term.

The assessment of the economic situation in Germany has also worsened in the current survey. The corresponding indicator dropped by 13.3 points to minus 21.4. Experts, therefore, assume that a slowdown in economic development will already be noticeable in March.

Expectations for the inflation rate in Germany jump by 107.7 points to a new value of 70.2 points, the Zentrum für Europäische Wirtschaftsforschung (ZEW), which translates to the Centre for European Economic Research, said in a press release.

“A recession is becoming more and more likely. The war in Ukraine and the sanctions against Russia are significantly dampening the economic outlook for Germany. The collapsing economic expectations are accompanied by an extreme rise in inflation expectations. The experts therefore expect a stagflation in the coming months. The worsened outlook affects practically all sectors of the German economy, but especially the energy-intensive sectors and the financial sector,” commented ZEW president Achim Wambach on current expectations.

The financial market experts’ sentiment concerning the economic development of the eurozone decreased by 87.3 points in March, falling well below zero again to minus 38.7 points. The situation indicator currently stands at minus 21.9 points, 22.5 points lower than in February.

Inflation expectations for the eurozone have risen by 104.6 points in the current survey. The indicator currently stands at 69.5 points. 76.5 per cent of the experts expect the inflation rate to increase in the next six months.

ALCHEMPro News Desk (DS)