German Economic Sentiment Rebounds in May
(MENAFN) Germany witnessed a notable upswing in economic confidence in May, following a sharp decline the previous month, which had marked a two-year low primarily due to tariff-related concerns.
This development was highlighted in data published on Tuesday by the Leibniz Centre for European Economic Research (ZEW).
The ZEW Indicator of Economic Sentiment for Germany experienced a dramatic leap of 39.2 points compared to April, reaching a value of 25.2 in May.
This represented the indicator’s most significant monthly increase since January 2023 and surpassed analysts’ forecasts, which had anticipated a figure of just 10.7.
The surge reflects increasing confidence among financial market professionals about Germany’s economic outlook.
"Expectations are brightening. The ZEW indicator sees a major improvement in May 2025 and compensates for part of the losses observed in the April survey," stated ZEW President Achim Wambach.
He attributed the improved sentiment to various factors, including "a new government in place, some progress in the tariff disputes and a stabilizing inflation rate," all of which have contributed to a boost in optimism.
Additionally, the ZEW report noted that the recent interest rate reduction by the European Central Bank, along with the anticipation of further cuts, is generating a favorable impact, especially for the construction sector.
Despite the positive shift in future expectations, the current appraisal of Germany’s economic conditions continued to show weakness.
The relevant measure slipped slightly by 0.8 points, settling at minus 82, indicating that present economic activity remains subdued.
In parallel, sentiment across the eurozone followed a similar upward trajectory.
The ZEW economic sentiment index for the broader euro area climbed by 30.1 points, reaching a value of 11.6, echoing the renewed confidence seen in Germany.
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