Germany: Jump in ZEW expectations reflects current misery – ABN Amro

The improvement merely reflects a dramatic deterioration in the part of the survey that measures current conditions, economists at ABN Amro apprise.

Key quotes

“Germany’s ZEW expectations indicator jumped higher in April, rising to +28.2, up from -49.5 in March.”

“The current conditions indicators (‘good’ minus ‘bad’) dropped to -91.5 in April, down from -43.1 in March, which implies that the series is almost at its lowest possible point of -100.”

“We expect two sharp contractions in quarterly GDP in 2020 Q1 and Q2 and a technical rebound in Q3. Only in the second half of 2021, a robust and sustainable recovery in growth is expected. Therefore, Germany’s GDP should be still below the level of 2019Q4 at the end of 2021.”