The German Institute for Economic Research (ZEW) reported in Mannheim on Tuesday that expectations for the German economy have shown a significant improvement in its July 2026 survey. The economic expectations index registered 26.3 points, marking an increase of 15.8 points compared to the previous month.
While the assessment of the current economic situation also saw an uptick, this increase was less pronounced. The current situation indicator for Germany lifted by 3.4 points to 77.6 points.
Achim Wambach, ZEW President, commented on the new findings, stating, “Expectations are brightening further in July. The reform package seems to be making an impact.” He noted that sectors reliant on exports, as well as domestic demand, experienced stable growth. However, he cautioned that the ongoing Iran conflict and oil prices remain major factors introducing uncertainty into Germany’s recovery.
Most industries recorded an improvement in July. Specifically, forecasts for mechanical engineering and private consumption improved by 14.5 and 14.7 points, respectively. The chemical and pharmaceutical industries, along with the metal sector, also saw stable growth in July, although they remain firmly in negative territory. In contrast to the June trend, the construction sector improved its balance by 12.7 points, approaching the zero line. Conversely, the automotive industry saw a sharp decline of 46.6 points, an 11.3-point drop from the previous month.
Regarding the Eurozone, expectations climbed in July. The index recorded a balance of 23.4 points, which is 13.9 points higher than in June. The perception of the situation is still negative, but it improved by 5.7 points, settling at -37.7 points.
