German ZEW indicator of economic sentiment rebounds in September, but outlook remains negative

The German economic sentiment surged in September, making up for the considerable fall in August. The ZEW Indicator of Economic Sentiment rose 21.6 points to -22.5 points from the previous month. The indicator therefore exhibits about the same level as in June, which was -21.1 points. However, it continues to be well below the long-term average of 21.5 points.

The assessment of the economic situation index dropped 6.4 points, with the corresponding indicator dropping to a current figure of -19.9 points. This has been the lowest since May 2010. ZEW President Professor Achim Wambach stated that the rise of the index is not an all-clear concerning the development of the German economy in the next six months.

“The outlook remains negative. However, the rather strong fears that financial experts had in the previous month regarding a further intensification of the trade conflict between the USA and China did not come true. And there is still hope that a no deal Brexit can be avoided. In addition, the European Central Bank is attempting to reduce the economic risks in the eurozone by further easing its monetary policy”, commented Achim Wambach.

Meanwhile, financial market experts’ sentiment about euro area’s economic development has also rebounded greatly, with the corresponding indicator rising 21.1 points to -22.4 points. The current economic situation index in the euro area dropped 1.1 points to -15.6 points.