German Economic Sentiment Improves In August: ZEW

(RTTNews) - Economic confidence in Germany improved in August but the assessment about current situation worsened and remained deeply in negative, survey data from the ZEW-Leibniz Centre for European Economic Research showed Tuesday.

The Indicator of Economic Sentiment rose to -12.3 in August from a seven-month low of -14.7 in July. The score was forecast to remain at -14.7.

The assessment of the current economic situation worsened considerably in August with the index falling sharply to -71.3 from -59.5 in the previous month. The score was seen at -63.0.

A similar negative assessment was last reported in October 2022.

"Financial market experts anticipate a slight uptick in the economic situation by year-end," ZEW President Achim Wambach said.

"However, these heightened expectations need to be viewed in the context of a significantly worsened assessment of the current economic situation in Germany," Wambach added.

Investors do not anticipate any further interest rate hikes in the eurozone and the United States, and the economic outlook for the USA has seen a significant increase, ZEW President noted. These factors contribute to the improved expectations for Germany.

The ZEW survey showed that economic confidence in the euro area strengthened notably in August. The investor sentiment index gained 6.7 points to -5.5 in August. Likewise, the current situation indicator advanced 2.4 points to -42.0.

Earlier this month, a monthly survey from the behavioral research institute Sentix showed investor confidence in Germany weakened due to the fall in both situation and expectations indices in July.

The International Monetary Fund projected the German economy to shrink 0.1 percent this year. At the same time, the euro area is forecast to expand 0.8 percent in 2023 and 1.4 percent next year.