The German ZEW Indicator of Economic Sentiment fell slightly by 7.2 points in August 2010. The indicator now stands at 14.0 points after 21.2 points in the previous month. This value is below the indicator's historical average of 27.3 points.

The German economy developed very dynamically in the second quarter of the current year. ZEW, Zentrum für Europäische Wirtschaftsforschung/Centre for European Economic Research, which is based in Mannheim, said the latest GDP growth estimates and corporate data from the current reporting period confirms this. The current decrease of the economic sentiment indicates that the enormous growth observed in the second quarter is unlikely to continue. Due to Germany's dependence on exports, major risks for economic growth arise from a weak development abroad, e.g. in the euro zone and the United States.

"Given that economic growth worldwide looses momentum, the euphoria about the growth rates in some branches makes financial market experts feel uneasy. Anyway, high growth rates are always easier to realise from a low base level, though with decreasing dynamics", says ZEW President, Prof. Wolfgang Franz.

Once again, the assessment of the current economic situation in Germany improves considerably compared to the previous month. In August the corresponding indicator rises by 29.7 points to 44.3 points. The economic expectations for the euro zone rise by 5.1 points in August. The respective indicator now stands at 15.8 points. The indicator for the current economic situation in the euro zone improves by 13.5 points and now stands at minus 13.0 points.

Some 284 analysts participated in the August-survey which was conducted during the period July26-August 16th. Analysts were asked about their expectations for the next 6 months. Numbers displayed are percentages (month-over-month percentage point changes in parentheses). Balances refer to the difference between positive and negative assessments.

German investor sentiment fell sharply in August, according to the ZEW index Tuesday. Frieder Mokinski from ZEW, Carsten Brzeski from ING Bank and Dan Greenhaus from Miller Tabak & Co. consider the outlook: