Data published by the Leibniz Centre for European Economic Research (ZEW) showed that the indicator of German economic sentiment rose again in February, exceeding economists' forecasts, and reaching its highest level since February 2023. In contrast, the assessment of the economic situation in Germany has decreased significantly.
According to the report, the indicator of economic sentiment rose to 19.9 points compared to 15.2 points in January. The index remains in positive territory for the fourth month in a row. Economists had expected the index to rise to 17.4 points. Meanwhile, the index of the current economic situation fell to -81.7 points from -77.3 points in January.
“The German economy is in a bad state. The assessment of the current economic situation has reached its lowest level since June 2020. On the contrary, economic expectations for Germany have improved again. Accordingly, more than 66% of respondents expect the ECB to cut interest rates over the next six months amid slowing inflation. Almost 75% of respondents expect the Fed to cut interest rates soon,” said ZEW President Professor Achim Wambach.
The data also showed that the indicator of economic sentiment in the eurozone rose to 25.0 points (one-year high) from 22.7 points in January. Consensus estimates suggested a drop to 20.1 points. The indicator of the current economic situation rose to -53.4 points from -59.3 points in January and inflation expectations fell to -61.1 points from -56.8 points.