Germany's ZEW Indicator of Economic Sentiment rose by 7.9 points to 34.2 in August 2026, following a sharp 15.8-point increase in July and clearly surpassing market expectations of 30. This was the highest reading since February, before the Middle East conflict undermined global confidence, and it indicates that Germany's reform package is beginning to lend support to the economic outlook.
In August, 46.2% of analysts expected economic activity to remain unchanged, 44% anticipated an improvement, and 9.8% forecast a deterioration. The assessment of the current economic situation also brightened: that index climbed 16.5 points to -61.1. At the same time, inflation expectations declined markedly, falling 13.1 points to 1.8.
