Financial News: German ZEW Economic Confidence Plummets

German ZEW Economic Confidence Plummets

08/13/2024 - 05:57:00 (RTTNews)

(RTTNews) - German economic sentiment deteriorated in August on ambiguous monetary policy, disappointing data from the US economy and escalating conflicts in the Middle East, survey results from the think tank ZEW showed Tuesday.

The ZEW Indicator of Economic Sentiment declined sharply by 22.6 points to 19.2 from 41.8 in July. The last time expectations deteriorated in a similar manner was July 2022.

This was the second consecutive fall and came in sharply below economists' forecast of 30.6.

The assessment of the current economic situation also deteriorated in August. The corresponding indicator slid 8.4 points to minus 77.3 points.

ZEW President Achim Wambach said economic expectations for the euro area, the US and China also deteriorated markedly. Consequently, the expectations for export-intensive German sectors were particularly affected.

"It is likely that economic expectations are still affected by high uncertainty, which is driven by ambiguous monetary policy, disappointing business data from the US economy and growing concerns over an escalation of the conflict in the Middle East," said Wambach.

The survey showed that sentiment among financial market experts concerning the development of the euro area registered the steepest fall since April 2020. The economic sentiment index plunged 25.8 points to 17.9 in August.

However, the current situation index improved 3.7 points to -32.4 in August.

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