Germany: Economy about to find a new equilibrium? - ING

Carsten Brzeski, chief economist at ING, points out that the German ZEW index increased for the fourth consecutive month, to -13.4 in February, from -15.0 in January while the current assessment component dropped for the fifth month in a row, to its lowest level since December 2014.

Key Quotes

“While the sharp correction in expectations had already come to an end in the second half of 2018, the current assessment component is still in free fall. A convergence, suggesting that the economy is about to find a new equilibrium, albeit at a lower pace.”

“Today’s ZEW index should also give some comfort to the European Central Bank, indicating that there are some rays of light. Yet, it will still be too little to take away the ECB’s increased concern.”

“The fact that with Peter Praet and Francois Villeroy, two senior policy-makers, in less than two days hinting at possible changes to the forward-guidance on rates is more than the usual whistling in the dark.”