ZURICH (MaceNews) – The economic outlook in Germany for the next six months fell more than expected in July, while current conditions improved markedly, according to the latest report from the ZEW Institute in Mannheim.
The Economic Sentiment indicator which measures economic expectations for the next six months fell 16.5 points in July to 63.3, coming in well below the median of 75.4 in an Econoday survey of economists’ forecasts.
Current conditions which had in previous months been underperforming in comparison to the expectations index, moved into positive territory for the first time in two years. The index rose 31.0 points in June to 21.9, far outperforming the 5.0 Econoday median.
Despite the decline in expectations, ZEW said “economic development continues to normalize” and stressed that even with the “significant” decline, the measure is still at a “very high level.”
“The financial market experts therefore expect the overall economic situation to be extraordinarily positive in the coming six months,” ZEW President Professor Achim Wambach said in a statement released with the results.
Inflation expectations in Germany fell 12.0 points in July to a reading of 68.6.
The same pattern of results was seen for the euro area with economic sentiment falling 20.1 points to 61.2 and current conditions rising 30.4 to 6.0, ZEW said.
As in Germany, inflation expectations for the euro area declined, falling 10 points to a reading of 69.6. Even so, over 75 percent of survey participants “still expect inflation in the euro area to rise further in the next six months,” the report concluded.
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