Germany’s ZEW Indicator of Economic Sentiment rose +7.3 pts MoM to +45.8 in December 2025, reflecting improved expectations after prolonged economic stagnation.

• The ZEW Current Situation Index fell -2.3 pts MoM to -81.0, indicating a slightly weaker assessment of present economic conditions despite better forward-looking sentiment.

• ZEW highlighted that expectations have turned more positive after three years of stagnation, with expansive fiscal policy cited as a source of potential economic momentum.

• Sentiment toward the automobile industry improved notably, with its sector indicator rising +7.7 pts to -22.0, marking one of the strongest gains among industries.

• Other export-oriented sectors, including chemicals, pharmaceuticals, and metals, also saw sentiment improve, though gains were smaller and conditions remained constrained by weak export volumes.

• ZEW noted that high tariffs and structural competitive disadvantages continue to weigh on export-driven industries, despite supportive fiscal policy.

• Euro area expectations rose +8.7 pts MoM to +33.7, outperforming Germany’s increase, while the eurozone current situation index slipped slightly by -1.2 pts to -28.5, suggesting modest regional improvement led by expectations rather than current activity.