(CEP News) Frankfurt - On Tuesday, the Centre for European Economic Research (ZEW) reported that German economic sentiment fell to -41.4 in May. Economists had expected an increase to -37.0 following April's -40.7 reading.
According to the ZEW press release, the indicator for economic sentiment were influenced principally by U.S economic expectations, the outlook for the Germany's exports and inflation risks."German firms were very successful in the first quarter of 2008. However, the economic momentum should gradually loose speed because of increasing refinancing costs and a strong euro. This should have a negative impact on firms.", ZEW President Wolfgang Franz said.
The economic sentiment indicator for the euro zone rose to -43.6 in May, up from the previous month's -44.8 and the -44.2 expected.
The ZEW current situation indicator for Germany came in at 38.6, higher than April's 33.2 reading and the expected 32.0 figure.
By Todd Wailoo, twailoo@economicnews.ca
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