Economic expectations index in Germany fell in January

The German Economic Expectations Index calculated by the ZEW Research Institute fell to 10.3 points in January 2025 from 15.7 points a month earlier.

This figure is significantly lower than the analysts’ forecast of 15.3 points.

According to the ZEW, the second consecutive year of recession has led to a drop in economic expectations in Germany. The drop in the index of economic expectations, in particular, may be due to the recently released GDP growth figures and increased inflationary pressures.

“A lack of private household spending and subdued demand in the construction sector continue to stall the German economy. If these trends continue in the current year, Germany will fall further behind the other countries of the Eurozone,” commented Achim Wambach, President of ZEW, on the results of the latest survey.

He added that there is also greater political uncertainty caused by the potentially difficult process of forming a government coalition in the country and the unpredictability of the economic policies pursued by the new Trump administration.

At the same time, the assessment of the current economic situation in Germany has changed only slightly – to minus 90.4 points from minus 93.1 in December 2024.

The mood of financial market experts regarding the economic development of the euro area in January was more positive than in December. The indicator rose by 1 point to 18 points. In this case, the assessment of the current economic situation also remained stable, amounting to minus 53.8 points, which is 1.2 points higher than in December.

As GMK Center reported earlier, Germany continues to discuss green steel. In particular, they relate to the realistic timeline for the transition of steel mills to hydrogen.