• Prior 58.3
• Current conditions -62.9 vs – 67.3 expected
• Prior -65.9

I had to double check the number because of the huge deviation. This is much lower than expected as the lowest forecast was 30.0. The US-Iran war and the surge in energy prices has certainly played a major role here.

WHAT IS THE ZEW INDEX

The ZEW Indicator of Economic Sentiment is an influential monthly survey that gauges the economic expectations of financial experts in Germany. It is considered a “leading indicator,” meaning it is used to gauge the future health of the German economy, the largest in the Eurozone, about six months in advance.

Unlike the Ifo Business Climate Index (which surveys company managers), the ZEW surveys up to 350 institutional investors and financial analysts (from banks, insurance companies, and financial departments). Experts are asked whether they expect the economic situation to improve, stay the same, or worsen over the next six months.

The index is a “diffusion index.” It is calculated by subtracting the percentage of pessimistic responses from the percentage of optimistic responses. If the index is above zero, it indicates that the majority of experts are optimistic about future growth. If it’s below zero, it signals prevailing pessimism.