Economic prospects further improving

Even though the economic upward trend is said to slightly lose momentum in March 2007, the overall economic prospects continue to be promising. The corresponding economic indicator for Germany calculated by the Centre for European Research (ZEW) now stands at 5.8 after 2.9 points in February. However, the current value still falls much short of the historic mean value which is 33.2 points.

In the opinion of the ZEW´ s economists the current data signal an ongoing upswing of the German economy. Despite VAT increase incoming domestic orders are stable as well as the spirits of consumers who were reassured by good news from the labour market. A reason for concern, however, are less incoming orders from abroad which, according to experts, could be interpreted as a sign of slackening global demand. Another risk comes in the form of increasing oil prices.

»The German economy continues growing. However, unions should not take occasion to demand excessive wage rises«, says the ZEW chairman Prof. Dr. Wolfgang Franz.

For the first time since June 2005 the indicator for economic development has slightly decreased by 1.7 points and currently stands at 69.2 points.

Economic prospects for the Eurozone have slightly dropped with the Euro indicator falling by 1.7 points in March to currently 5.1 points. The indicator for the state of the economy in the Eurozone has marginally increased in March by 0.2 points and stands at 66.9 points.

296 analysts and institutional investors took part in the ZEW survey. The economic prospect indicator reflects the difference between positive and negative assessments of the future economic development over a period of six months. A table with more details is available online. GERMAN