Germany’s ZEW Economic Sentiment dropped sharply in September, falling from 19.2 to 3.6, significantly missing expectations of 18.6. Current Situation Index also saw a stark declinefrom -77.3 to -84.5, its lowest level since May 2020.
In the broader Eurozone, ZEW Economic Sentiment fell to 9.3, down from 17.9, while Current Situation Index dropped -8 points to -40.4. The data suggests that confidence across the region is waning, though Germany’s drop was notably more severe.
ZEW President Achim Wambach highlighted that “the hope for a swift improvement in the economic situation is visibly fading,” adding that the balance between optimists and pessimists is now evenly split.
The sharp fall in expectations for Germany signals that economic pessimism is growing faster than elsewhere in the Eurozone. Wambach also noted that most respondents seem to have already accounted for ECB’s recent interest rate decision in their expectations.
