Data published by the Leibniz Centre for European Economic Research (ZEW) showed that the indicator of German economic sentiment rose again in March, exceeding economists' forecasts, and reaching its highest level since February 2023. However, the assessment of the economic situation in Germany has barely changed.
According to the report, the indicator of economic sentiment rose to 31.7 points compared to 19.9 points in February. The index remains in positive territory for the fifth month in a row. Economists had expected the index to rise to 20.6 points. Meanwhile, the index of the current economic situation rose to -80.5 points from -81.7 points in February.
“Economic expectations in Germany have improved significantly. At the same time, more than 80% of respondents predict that the ECB will cut interest rates in the next six months. This could explain the more optimistic outlook of the German construction industry. The German export sector is benefiting from increased economic expectations for China, as well as from the expected depreciation of the dollar against the euro. Meanwhile, the assessment of the economic situation remains at a very low level. This development somewhat diminishes the increased economic expectations,” said ZEW President Professor Achim Wambach.
The data also showed that the indicator of economic sentiment in the eurozone rose to 33.5 points (the highest value since February 2022) from 25.0 points in February. Consensus estimates suggested a rise to 25.4 points. The indicator of the current economic situation fell to -54.8 points from -53.8 points in February and inflation expectations fell to -64.3 points from -61.1 points.