Economic Sentiment Falls Sharply In Germany

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The latest ZEW survey of economic sentiment shows a big decline.——–

The ZEW Indicator of Economic Sentiment for Germany has decreased by 12.6 points to a level of 10.8 points in May 2012. Thus, the indicator has deteriorated for the first time after registering five consecutive increases.

As a result expectations about the development of the German economy in the next six months are still at positive territory, but have tarnished compared to the previous survey. It may have contributed to this month’s decline that the outcome of the elections in Greece and France has made it more doubtful that European governments will resolutely fight the sovereign debt crisis.

“Against the backdrop of the sovereign debt crisis in the Eurozone, economic risks have risen during the previous weeks according to the financial market experts. In view of the recession in some problem countries of the Eurozone it is important to pursue austerity measures with sound judgement. Growth and consolidation do not contradict each other,” says ZEW President Prof. Dr. Dr. h.c. mult. Wolfgang Franz.

The assessment of the current economic situation for Germany has improved slightly in May. The corresponding indicator has increased by 3.4 points to the 44.1 points-mark. Economic expectations for the Eurozone have deteriorated by 15.5 points in May. The respective indicator now stands at minus 2.4 points. The indicator for the current economic situation in the Eurozone has decreased by 11.2 points and now stands at minus 60.2 points.

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