Germany’s ZEW Economic Sentiment for July plunged significantly, from -8.5 to -14.7, far underperforming the expected -9.5. Additionally, Current Situation Index dropped from -56.5 to -59.5, a decline which was marginally better than anticipated -60.0.
Similarly, Eurozone’s ZEW Economic Sentiment also fell from -10 to -12.2 in July, coming in under the anticipated -10.2. Current Situation Index also took a dip, decreasing by -2.5 points to -44.4.
ZEW President Achim Wambach expressed concern over the economic outlook, stating: “The ZEW Indicator of Economic Sentiment is shifting even more noticeably into negative territory. Financial market experts predict a further deterioration in the economic situation by year-end.”
According to Wambach, key drivers for this economic pessimism include the anticipated rise in short-term interest rates in Eurozone and US, as well as a perceived weakness in important export markets like China.
He noted: “The industrial sectors are likely to bear the brunt of the anticipated economic downturn, with profit expectations for these export-oriented industries experiencing a substantial decline once again.”
