A new ZEW survey points to growing doubts about both the German and European economies. At the same time, inflation and interest rates continue to weigh heavily on expectations for the coming months.
ZEW is based on a monthly survey among financial analysts and investors. In April, 192 analysts participated, who were asked about their views on the economy for the next six months.
For Germany, the expectation indicator stands at minus 17.2. This means that more expect a deterioration than an improvement in the economy over the next six months. In the euro area, expectations are also negative at minus 20.4.
At the same time, the survey paints a weak picture of the economy here and now. Only 0.5 per cent of respondents call the situation in Germany good, while 74.2 per cent call it bad.
Inflation also continues to weigh heavily in the assessment of the coming months. In Germany, 85.8 per cent expect rising inflation, and in the euro area, the proportion is 85.3 per cent. At the same time, in the euro area, many more expect higher short-term interest rates.
For companies with exports, construction, and financing needs, the survey thus points to a market with weaker confidence in growth, continued price pressure, and the prospect of expensive money.
