Germany's key ZEW economic expectations indicator tumbled 19.2 points in November to plus-4.2, after falling by 16.1 points the month earlier. The fall was worse than expected by economists, who on average had forecast the index to fall to plus-10 from 23.4 in October, and is sure to add to pressure on the European Central Bank (ECB) to cut interest rates at its December meeting.
The index for the overall economic situation in Germany fell 3.6 points to minus 94.1 in November from October, the institute said. The eurozone expectations index fell 10.1 points in November to plus-24.2, while the situation indicator was down 2.5 points to minus-75.6. Commenting on the poor showing, Wolfgang Franz, president of the ZEW institute, was downbeat, warning, "The expectations indicate the economy will nosedive in the first half of 2003."
He said the drop in the index was due to the necessity for the ECB to focus on the entire eurozone in setting its monetary policy, global political uncertainty, and worries about the development of Germany's economic policy. //www.fxcentre.com