German ZEW Index Rises Surprisingly In May But Fresh Risks Loom in China
2022.05.10 12:31
By Geoffrey Smith
Investing.com — Confidence in Germany’s economic prospects surprisingly improved in May, recovering slightly from the shock created by Russia’s invasion of Ukraine.
The closely watched ZEW Economic Sentiment index rose to -34.3 from -41.0 in April, thanks to an improvement in assessments of the outlook for the economy. Assessments of current conditions, however, continued to deteriorate: the relevant subindex fell again to -36.5, worse than forecast.
The Mannheim-based ZEW stressed, however, that the index remained close to historic lows, with renewed supply chain problems in China offsetting any marginal relief at Germany being able to avoid a sudden stop of energy imports from Russia. The EU intends to phase out imports of Russian coal, oil, and refined products by the end of the year but Germany has successfully lobbied against imposing a timeline for ending gas supplies, which are harder to substitute.
COVID restrictions in China are “a heavy burden for future economic growth in Germany,” the institute warned.
