FXstreet.com (Barcelona) - German citizens' economic expectations have deteriorated sharply further in June to levels way below the historical average weighed by decreasing incoming orders together with rising prices on food and energy, as the latest survey by the ZEW Institute shows.
The ZEW indicator for economic sentiment in Germany has declined 11 points in June to -52.4 points from -41.4 points in may, a well deeper than expected decline, as market analysts had forecasted a reading of about -42.5 un June. The index has been falling continuously for more than a year, reaching levels sharply lower than the 29.2 points historical average.
The reasons for the worsening on the Germans' economic confidence is, according to the ZEW, a combination of decreasing orders which advances a weakening of German production over the next months, plus higher prices on food and energy that reduce considerably the German's power for purchase. On top of everything, finantial markets' crisis and the increasing odds for a rate hike by the ECB do not contribute to paint a brighter picture.
The economic expectations for the Euro Zone dropped by 9.1 points to -52.7 points, while the current situation index fell by 3.5 points to 7.9 points.