The German economic outlook presented by the Zentrum für Europäische Wirtschaftsforschung (ZEW) has deteriorated in its latest October 2026 survey. The economic expectations index now stands at 28.1 points, marking a decline of 6.6 points from the previous month’s figure, as the ZEW reported from Mannheim on Tuesday.
Conversely, the assessment of the current economic situation showed a significant rebound. The current situation index for Germany has improved sharply, rising by 11.2 points to reach -35.9 points.
Achim Wambach, President of ZEW, commented on the results, stating that although the German economy is slowly moving out of stagnation, the recovery is not self-perpetuating. He attributed this to ongoing weaknesses in private consumption and private investment, which are being hampered by high energy prices. These prices, he noted, are pressing on real incomes, increasing production costs, and keeping inflation at a higher level for longer.
For the beginning of the fourth quarter, a mixed picture emerges across various sectors. Banks and insurance companies, which had recorded strong recent growth, have seen sharp declines in October, dropping by 18.4 and 9.0 points respectively. However, they remain firmly in positive territory with scores of 34.5 and 37.4. Other sectors also registered losses, including services (-6.8 compared to the previous month) and telecommunications (-8.2 points). In contrast, positive momentum is noted in the steel and metal production and electric industries.
Looking at the wider region, expectations for the Eurozone fell again in October. The index dropped by 7.3 points, settling at a balance of 18.5 points, which is lower than in September. The assessment of the Eurozone’s current situation, however, remained largely unchanged, holding steady at -14.8 points (a change of -0.9 points from September).
