The index of economic sentiment in Germany, which is calculated by the Center for European Economic Research (ZEW), dropped sharply in February, falling from 18.0 points to 8.7 points. Thus, the indicator remains slightly below its level of December 2019. The assessment of the economic situation in Germany is also worsening compared to the previous month, with the corresponding indicator falling to a level of minus 15.7 points, with 6.2 points lower compared to January.

“The dangerous negative effects of the coronavirus epidemic in China on world trade are causing a significant drop in ZEW’s economic sentiment in Germany. Expectations for the development of export-intensive sectors of the economy are declining particularly sharply. In addition, at the end of 2019 and the beginning of 2020, the German economy is expected to develop worse than expected. Both the decline in the assessment of the economic situation and the fall in expectations make it clear that economic development is quite fragile at the moment”, said ZEW President, Prof. Achim Wambach.

In addition, at the end of 2019 and the beginning of 2020, the German economy had seen worse than expected development, according to Achim Wambach. “The downward revised assessment of both the current economic situation and the decline in business expectations make it clear that economic development in the country is rather fragile at the moment”, noted he.

Financial market experts’ expectations for Eurozone economic development are slightly lower than those for Germany, falling from 15.2 points to their current level of 10.4 points in February. The indicator for the current economic situation in the Eurozone in February remained almost unchanged at the level of minus 10.3 points, with 0.4 points lower than in January.

Alongside economic expectations, inflation expectations for the euro area have fallen, falling by 13.7 points to 4.7 points.