Is the German ZEW signaling recovery?

Wednesday 23 January 2013

Last night saw an impressive rise the German ZEW survey, as DFM recounted this morning. I thought I take a look and see what it can tell us about the prospects for German growth.

The current situation was flat but tends to lags growth slightly, as you’d expect:

Here is the expectations component (which saw the big jump) charted against GDP (in yellow):

The expectations index has a good record of leading growth but its absolute level remains consistent with current growth rates. Next month will be interesting.

About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.