The ZEW expectations index for the German economy fell surprisingly steeply in May from 53.3 to 41.9 points. This probably came as a punch to the stomach for economic optimists, as there are now increasing signals that the German economy is feeling considerable headwind. Analysts expect that the Ifo business climate index – due out this Friday – will come in lower in May for the first time in six months. As a result, analysts even see downside risks to the already conservative growth forecast for Germany of 1.8% in 2015.This may have been a punch below the belt for economic optimists: The ZEW expectations index for the German economy fell steeply in May from 53.3 to 41.9 points. The figure makes bit surprise, although Commerzbank’s forecast of 45.0 was well below the average of the economists polled (consensus: 49.0). Today’s disappointing ZEW outturn confirms the outlook that trees don’t grow into the skies for the German economy, as our Early Bird leading indicator has been signalling since the end of 2014. Ifo business expectations for the German economy in the coming six months – a sub-component of the overall index – also declined in April from 103.9 to 103.5 points. Commerzbank expects the headline Ifo business climate index dropped from 108.6 to 108.0 in May.
The material has been provided by InstaForex Company – www.instaforex.com