ZURICH (MaceNews) – While the economic outlook for Germany improved for six months hence, current conditions are being negatively impacted by supply bottlenecks and concerns over inflation, according to the latest survey data from the ZEW Institute in Mannheim.
Current conditions fell more than expected in November, with the index shedding 9.1 points to 12.5, and well below the median of 17.0 in an Econoday survey of economists’ forecasts.
At the same time, economic sentiment unexpectedly improved, suggesting that investors think recent supply issues and inflation concerns will be under control in six months from now.
The ZEW Economic Sentiment Index rose 9.4 points in November to 31.7 which was an unexpected increase from the 20.0 Econoday median, and the first time since May that the indicator rose.
“Financial market experts are more optimistic about the coming six months. However, the renewed decline in the assessment of the economic situation shows that the experts assume that the supply bottlenecks for raw materials and intermediate products as well as the high inflation rate will have a negative impact on the economic development in the current quarter. For the first quarter of 2022, they expect growth to pick up again and inflation to fall both in Germany and the eurozone,” comments ZEW President Professor Achim Wambach on current expectations.
Inflation expectations for both Germany and the Eurozone declined in November, according to ZEW. For Germany the index fell 34.6 points from October to -19.8, while for the Eurozone it was 31.4 points lower to -14.3.
These declines show that financial market experts expect the inflation rate in the eurozone to decline over the next six months, ZEW said.
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