ZEW: German and Eurozone Economic Sentiment Declines in March 2023 Survey

Key Takeaways

• The ZEW Indicator of Economic Sentiment for Germany significantly declined in the March 2023 survey by 15.1 points to reach a value of 13.0 points.
• Despite the decline, expectations remain positive, but the assessment of the economic situation in Germany has marginally worsened.
• Financial market experts’ sentiment regarding the economic development of the Euro Zone also worsened considerably, with a drop of 19.7 points in March.

ZEW Indicator of Economic Sentiment

In the March 2023 survey, the ZEW Indicator of Economic Sentiment for Germany experienced a significant decrease, dropping by 15.1 points to reach a value of 13.0 points. Despite this decline, expectations remain positive.

Furthermore, the evaluation of the economic situation in Germany has slightly worsened, with the corresponding indicator dropping by 1.4 points to reach a value of minus 46.5 points.

ZEW President Professor Achim Wambach attributes the decline in sentiment to the high level of uncertainty in the international financial markets, with the assessment of earnings development for banks deteriorating considerably, although still remaining slightly positive. Estimates for the insurance industry have also decreased significantly.

In addition, financial market experts’ sentiment regarding the economic development of the Euro Zone has worsened significantly, with a drop of 19.7 points to reach a reading of 10.0 points.

The situation indicator has also declined by 3.0 points to reach a value of minus 44.6 points, compared to the previous month.