Investor morale in Germany for the next six months improved further in September, after an increase in August, while the euro zone’s largest economy is going through a bad patch weighed down by its industrial sector.
This closely watched indicator of the economic climate gained 0.9 points over one month while remaining in negative territory, -11.4 points, indicated the economic research institute ZEW in a press release published Tuesday.
This is better than what analysts surveyed by Factset predicted, who expected a score of -15.1 points.
On the other hand, the component of the indicator assessing the current situation has reached its lowest level in three years (-79.4 points), a consequence of the poor economic situation which places Germany at the back of the pack in European growth.
The improvement in economic expectations is accompanied by significantly more optimistic outlooks regarding the development of international stock markets, underlines Achim Wambach, president of ZEW, quoted in the press release.
This is because the proportion of respondents who expect stable interest rates in the eurozone and from the United States has continued to increase, he adds.
The European Central Bank opens the ball of meetings of the major central banks on Thursday, with suspense remaining over what it could decide, between a probable final increase in its rates in the face of falling inflation or a pause after nine increases in a row.
The European Commission very significantly reduced its growth forecast for Germany in 2023 on Monday, expecting a decline in gross domestic product (GDP) of 0.4%, compared to growth of 0.2% expected so far.
Germany is suffering from weak exports and a gloomy climate in industry, particularly in sectors that consume a lot of energy, which are not recovering from the price shock linked to the Russian war in Ukraine.
Added to these economic difficulties are the country’s structural problems, between bureaucratic red tape hampering investments and demographic aging.
Chancellor Olaf Scholz announced tax measures at the end of August to revive activity, but he is struggling to convince economic circles.