ZEW Indicator of Economic Sentiment for Germany fell sharply in August

EU Economy
ZEW Indicator of Economic Sentiment for Germany fell sharply in August
By Finfacts Team
Aug 12, 2014 - 11:43 AM

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The ZEW Indicator of Economic Sentiment for Germany fell sharply in August 2014. The indicator has lost 18.5 points and now stands at 8.6 points (long-term average: 24.6 points). Decreasing for the eighth consecutive time, the indicator has reached its lowest level since December 2012. The current decline is the strongest since June 2012.

The Centre for European Economic Research (ZEW - - Zentrum für Europäische Wirtschaftsforschung) in Mannheim is a nonprofit and independent institute. It was founded in 1990 on the basis of a public-private initiative in the federal state of Baden-Württemberg in co-operation with the University of Mannheim.

ZEW said the decline in economic sentiment is likely connected to the ongoing geopolitical tensions that have affected the German economy by now. In particular, current figures on industrial production and incoming orders suggest markedly reduced investment activities on the part of German firms against the backdrop of uncertain sales prospects. Since the economy in the Eurozone is not gaining momentum either, the signs are that economic growth in Germany will be weaker in 2014 than expected.

The assessment of the current economic situation in Germany has decreased as well. The respective indicator has lost 17.5 points and now stands at 44.3 points.

The ZEW Indicator of Economic Sentiment for the Eurozone also declined significantly in August. The indicator has lost 24.4 points compared to the previous month, now standing at 23.7 points. The indicator for the current economic situation in the euro area decreased in August by 2.3 points to a value of minus 33.8 points.

222 analysts participated in the August-survey which was conducted during the period 7/28-8/11/2014. Analysts were asked about their expectations for the next 6 months.