German business sentiment recovers in January-ZEW
2023.02.21 09:00
German business sentiment recovers in January-ZEW
By Kristina Sobol
Budrigannews.com – The ZEW economic research institute reported on Tuesday that investor sentiment in Germany continued to improve in February as the economic outlook for the largest economy in the euro zone significantly improved.
The institute’s economic sentiment index increased for the fifth month in a row, reaching 28.1 from 16.9 in January. A Reuters poll had predicted a 22.0 in February.
According to Achim Wambach, president of the ZEW, “as in the previous month, the increase in expectations can be traced back to higher profit expectations in the energy-oriented and export-oriented sectors, as well as the consumer-related parts of the economy.”
Even though it remained in negative territory, the assessment of Germany’s economic situation also continued to improve, rising for the fourth month in a row. The index increased by 13.5 points from the previous month to minus 45.1 points.
According to Wambach, the majority of survey respondents anticipate that the economic situation will improve within the next six months, despite the fact that the current situation is still regarded as relatively unfavorable.
Claus Vistesen, Pantheon Macroeconomics’ chief euro zone economist, stated, “These data are not always reliable indicators for conditions in the wider economy, but they are now pointing to a pick-up in economic activity and economic sentiment.”
According to Vistesen, the division between rising expectations and a current conditions index that is still low is the primary indicator of these anticipated improvements.
Alexander Krueger, chief economist at Hauck Aufhaeuser Lampe Privatbank, stated, “In terms of sentiment, a mild recession still seems to be only the worst-case scenario.”
However, Krueger added that the structural flaws that have developed over time should not be concealed by the fact that the German economy is performing reasonably well.
