CdM | Economic sentiment has improved again in Germany. In the May survey, the ZEW indicator shows that, at 25.2 points, it is 39.2 points higher than in the previous month, thus clearly in positive territory. ‘With the arrival of the new government, some progress in the tariff disputes and a stabilising inflation rate, optimism has increased.’
This is according to ZEW President Professor Achim Wambach, who adds that ‘expectations are encouraging. The ZEW indicator forecasts a significant improvement in May 2025 and compensates for some of the losses observed in the April survey.’
In almost all sectors, perceptions have improved in the May survey. The outlook has improved in particular for the banking sector and export-intensive sectors such as the automotive and chemical industries, as well as metal, machinery and steel production.
Meanwhile, the assessment of the current economic situation remained virtually unchanged, with the indicator falling by 0.8 points to -82 points.
As explained, the recent cut in interest rates by the European Central Bank (ECB) and the future rate cuts planned are having a positive effect, especially on the construction sector. Respondents also expect domestic demand, which has been moderate lately, to recover over the next six months and boost the German economy, which is currently stagnating.
As for the Eurozone, the perception of economic development is also on the rise. With an increase of 30.1 points, it currently stands at 11.6 points, which is in positive territory. In addition, the assessment of the current economic situation has also improved, albeit less markedly. At -42.4 points, it is 8.5 points higher than in April.
