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German ZEW Economic Confidence Unexpectedly Deteriorates In April
(RTTNews) - German economic confidence deteriorated unexpectedly in April as high inflation and restrictive monetary policy weighed on economic activity.
The ZEW Indicator of Economic Sentiment fell sharply to 4.1 in April from 13.0 in March. The score was forecast to improve to 15.3.
The score suggested no significant improvement in the economic situation over the next six months.
Meanwhile, the current situation index climbed to -32.5 in April from -46.5 in the previous month. The reading was forecast to climb to -40.0.
"Despite the improvement, the economic situation is still considered relatively negative," the Mannheim-based think tank said.
Banks are likely to be more cautious in granting loans, ZEW President Achim Wambach said. High inflation as well as the globally restrictive monetary policy is weighing on the economy.
Nonetheless, Wambach observed that the danger of an acute global financial market crisis seems to have been averted. Moreover, earnings expectations for banks and insurance companies improved from the previous month and are once again clearly in positive territory.
Financial market experts' sentiment regarding economic development in the euro area also worsened in April. The corresponding index dropped 3.6 points to 6.4 in April. Meanwhile, the situation indicator gained 14.4 points to -30.2.
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