Germany’s ZEW Economic Sentiment index took a significant hit in August, falling sharply from 41.8 to 19.2, well below the expected 30.6. This marks the steepest monthly decline since July 2022. Current Situation Index also worsened, dropping from -68.9 to -77.3.
Similarly, Eurozone’s ZEW Economic Sentiment index fell from 43.7 to 17.9, missing expectations of 35.4. However, Current Situation Index for Eurozone showed a slight improvement, rising by 3.7 points to -32.4, although it remains in negative territory.
ZEW President Achim Wambach noted that the economic outlook for Germany is “breaking down.” He highlighted that this month’s survey revealed the sharpest decline in economic expectations over the past two years, not just for Germany, but also for the Eurozone, the US, and China.
Wambach pointed out that expectations for “export-intensive” sectors in Germany are particularly bleak. He attributed this deterioration to ongoing high uncertainty, driven by unclear monetary policy directions, disappointing business data from the US, and escalating concerns about the Middle East conflict.
Full German ZEW economic sentiment release here.
