German ZEW Economic Confidence Falls In July

German economic sentiment weakened for the first time in four months in July as investors expect a slow recovery from the downturn caused by the coronavirus pandemic, survey data from the ZEW – Leibniz Centre for European Economic Research showed Tuesday.

The ZEW Indicator of Economic Sentiment fell to 59.3 in July from 63.4 in June. The score was forecast to rise to 60.0.

Meanwhile, the assessment of the current situation improved slightly for the second time since January 2020. The current conditions index rose to -80.9 from -83.1 in the previous month.

Economists had forecast the current conditions indicator to climb to -65.0 in July.

“After a very poor second quarter, the experts expect to see a gradual increase in gross domestic product in the second half of the year and in early 2021,” ZEW President Achim Wambach, said.

The sentiment index points to a leveling off in the economy over the summer months, Carsten Brzeski, an ING economist said.

The economy ministry, on Monday, said the largest euro area economy has passed the trough. However, the ministry observed that the recovery process is just beginning and the capacities are still underutilized. Production is expected to pick up in months ahead on increased order intake.

Sentiment concerning the economic development of the Eurozone improved for the fourth consecutive time, with the corresponding indicator climbing 1.0 points to 59.6 points in July, ZEW survey showed.

The indicator for the current economic situation climbed 0.9 points to a level of -88.7 points.

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