Mid-term expectations of financial analysts and institutional investors have deteriorated in January. The corresponding index fell by 5.4 points to 10.3, the Centre for European Economic Research (ZEW) announced in Mannheim on Tuesday.
The assessment of the current economic situation improved slightly. The location indicator for Germany rose by 2.7 points and now stands at -90.4 points.
Expectations of financial market experts for the economic development in the eurozone are currently at 18.0 points, a 1.0-point increase from December 2024. The assessment of the current economic situation in the eurozone also changed little, with the location indicator rising by 1.2 points to a new value of -53.8 points.
“The second recession in a row is causing expectations to sink” commented ZEW President Achim Wambach on the current results. At the beginning of the year, a noticeable decline in the expectations indicator for Germany is being observed. “This could be due to the recently published poor GDP growth figures and rising inflation pressure” Wambach said.
Lack of consumption by private households and a weak demand for construction continued to burden the German economy. “If these trends continue in the current year, Germany will continue to fall behind the other eurozone countries” the ZEW President said. “Additionally, a growing political uncertainty is emerging. This is driven by the potential for a difficult coalition formation in Germany and uncertainty over the economic policy of the Trump administration.