ZEW Economic Expectations is a leading indicator of economic health based on surveyed institutional investors and analysts. The survey asks respondents to rate the 6-month economic outlook for the nation. A reading above 0.0 indicates optimism while a reading below 0.0 implies pessimism.
The indicator incorporates current economic conditions in constructing a 6-month outlook. Since investors and analysts are highly informed regarding economic conditions, changes in their sentiment can be a reliable forecast of future economic activity.
If the current reading is an improvement from the past figure or is better than forecasted, it could have a positive impact on the nation