- Wednesday, October 16, 2024
A recent survey conducted by the ZEW Centre indicates that Germany's economic outlook has unexpectedly improved in September. The survey reveals that there are higher expectations of interest-rate pauses, which is a positive sign for the country's economy. This news comes just days before the next European Central Bank meeting.
According to the survey, the ZEW Centre's indicator of economic sentiment for Germany over the next six months rose to minus 11.4 in September, compared to minus 12.3 in August. Economists had predicted a drop to minus 15.0, making this improvement even more unexpected.
ZEW President Achim Wambach commented on the brighter economic prospects, stating that they align with a more optimistic view of international stock market developments. Respondents to the survey attributed the bright prospects to higher expectations of stable interest rates in the eurozone and U.S., as well as easing rates in China.
It's important to note that this indicator is the final domestic data point ahead of the upcoming ECB meeting. During the meeting, policymakers will decide whether to hike interest rates again, which could potentially put a strain on spending.
However, in contrast to the positive economic sentiment indicator, the ZEW's separate index for measuring the current economic situation in Germany recorded a further decline in September. It dropped to minus 79.4 from minus 71.3 in August, marking its lowest value since August 2020. Economists had expected a smaller fall to minus 71.5.
Overall, this unexpected improvement in Germany's economic outlook provides some optimism for the future. It will be interesting to see how policymakers respond during the upcoming ECB meeting.
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