Germany ZEW Economic Confidence At 6-Month High

German economic confidence improved more-than-expected to a six-month high in January as the economy is expected to pick up over the coming months, survey results from the ZEW – Leibniz Centre for European Economic Research showed on Tuesday.

The ZEW Indicator of Economic Sentiment rose to 51.7 in January from 29.9 in the previous month. The reading was well above the economists’ forecast of 32.0.

Meanwhile, the assessment of the economic situation worsened again in the current survey. The corresponding index dropped 2.8 points to -10.2 in January. The expected reading was -8.5.

“The economic outlook has improved considerably with the start of the new year,” ZEW President Achim Wambach, said. The majority of financial market experts assume that economic growth will pick up in the coming six months.

It is likely that the phase of economic weakness from the fourth quarter of 2021 will soon be overcome, said Wambach. The main reason for this is the assumption that the incidence of COVID-19 cases will fall significantly by early summer.

The more positive economic expectations include the consumer-related and export-oriented sectors and thus a large part of the German economy, ZEW President added.

The financial market experts’ sentiment concerning the economic development of the eurozone increased 22.6 points to 49.4 in January. The current situation indicator fell to a new level of minus 6.2 points from -2.3 in December.

Inflation expectations for the eurozone continued to decline in January. The indicator came in at minus 38.7 points, which corresponds to a decrease of 5.4 points from December. About 58 percent of the experts expect the inflation rate to decline in the next six months.

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