Germany’s economic sentiment fell sharply in November as domestic political gridlock and concerns about Donald Trump’s potential trade policies clouded the outlook.
The ZEW Economic Sentiment Index, a key measure of economic confidence among experts, dropped from 13.1 in October to 7.1, well below expectations and marking one of the lowest readings in 2024.
Analysts attribute the decline to persistent issues within Germany’s coalition government and apprehension over Trump’s unpredictable tariff agenda. The index, based on insights from up to 300 economists, bankers, and analysts, had shown a brief improvement in October but has since reversed due to these combined factors.
Germany’s present economic outlook has also worsened, with the ZEW’s current situation index, which gauges expert views on immediate economic conditions, declining by 4.5 points to -91.4. Additionally, the Federal Statistical Office reported a rise in Germany’s annual inflation rate, which reached 2% in October, up from 1.6% in September.
