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Analysis

Sentiment in Germany declines after US elections

  • October’s inflation rate in Serbia increased to 4.5% y/y.
  • In Romania industrial production landed at -3.6% y/y.
  • Later today, Czechia, Poland, Serbia and Romania will publish current account data.
  • At the top of that Poland will release trade balance as well as exports and imports performance for September.

Economic developments

The ZEW Indicator of Economic Sentiment for Germany (that is expectations regarding economic development) declined in the November 2024 survey to 7.4 points. Assessments of the current economic situation in Germany are also increasingly pessimistic. The corresponding indicator fell 4.5 points and is now at minus 91.4 points, which is the lowest since the pandemic (in April and May 2020 the ZEW indicator bottomed out with values -91.5 and -93.5 respectively). This is the first assessment of market sentiment after the outcome of the US election. According to the statement, the outcome of the US presidential election is likely to be the main reason for the decline of the sentiment in Germany. The collapse of the German government is another factor that could have influenced economic expectations. In general, German economy clearly lacks the impulse for the recovery, as both ZEW Expectations and Current Situations Indicators have been following downward trend for the extended period of time. The uncertainty regarding Trump’s trade policies and its impact on economic growth only adds to negative assessment of economic situation.

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