Investor sentiment in the Euro area continued its upward trend in June, reaching its highest level since early 2022. However, the momentum remained sluggish as the economy struggled to return to pre-war levels seen before the conflict in Ukraine began.
The economic confidence index increased to +0.3 in June from -3.6 in May. Contrary to forecasts, which expected the index to remain negative at -1.5, this positive reading marks the first time sentiment has turned positive since February 2022, following eight consecutive improvements.
Despite ongoing recovery, the think tank noted that the upward movement lacks strong momentum. The data indicates the European economy is still grappling to regain the footing it had before the war in Ukraine erupted.
Even with this increase, current conditions remain in negative territory. The current situation index rose to a 13-month high of -9.0, up from -14.3 in May. The -9 points underscore the statement that the recovery is progressing slowly and is challenging, advancing in incremental steps.
Conversely, the expectations component improved by 2.2 points, reaching +10.0 in June—its highest score since February 2022. According to Sentix, this positive expectations value provides some hope that the recovery trend may persist in the coming weeks.
The survey also revealed that the stabilization of the German economy is showing only moderate progress. The economic situation index for Germany improved to -12.5 in June from -17.5 in May, advancing for the third consecutive month to reach its highest level since April 2023.
The current situation indicator for Germany increased to -26.3 from -33.5 in May, while the expectations index rose to 2.3 from zero.
Overall, while certain areas display signs of improvement, the broader picture indicates a slow and challenging recovery process within the Eurozone.
