2026.05.1209:15:26UTC+00German Investor Sentiment Improves in May

Germany’s ZEW Indicator of Economic Sentiment rose by seven points to -10.2 in May 2026, rebounding from a more than three-year low of -17.2 in April and beating market expectations of -19.8. Although the uptick reflects improving expectations, the indicator remains in negative territory as investors look for a rapid resolution to the conflict in Iran. At the same time, subdued industrial production, higher energy prices, and inflation above 2% continue to weigh on the outlook.

A tentative recovery is expected in the second half of 2026, assuming an easing of the Middle East conflict and the effective rollout of government stimulus measures. Performance varied significantly across sectors: sentiment toward the automotive industry deteriorated by 13 points to -57.2, and mechanical engineering fell by 9.2 points to -32.1. By contrast, the IT sector improved by 12.1 points to 56.6, and metal production and construction also posted gains.

Meanwhile, the index measuring the current economic situation declined to -77.8 in May, its lowest reading since December 2025 and slightly below the consensus forecast of -77.5.