Economic sentiment in Germany has experienced a notable decline, according to the latest survey data released by the Centre for European Economic Research (ZEW) on Tuesday. The ZEW’s economic expectations index fell to 34.7 points in August 2025, a decrease of 18.0 points from the previous month.
ZEW President Achim Wambach attributed the downturn to disappointment surrounding the recently announced EU-US trade agreement, alongside weaker-than-anticipated economic figures from the second quarter of 2025. He highlighted a particularly pessimistic outlook for the chemical and pharmaceutical industries. “The mechanical engineering, metal production and automotive sectors are also significantly affected” Wambach stated.
Alongside the declining expectations, the assessment of current economic conditions has also weakened. The ZEW’s current situation indicator for Germany fell to -68.6 points, a decrease of 9.1 points from the previous month.
While initial growth estimates for the Eurozone in the second quarter of 2025 were better than those for Germany, expectations for the currency union have also deteriorated. The Eurozone expectations index currently stands at 25.1 points, down 11.0 points from the previous month. Assessment of the current situation also fell, registering -31.2 points, a decrease of 7.0 points.
