Confidence among German investors increased less-than-expected in May as worries over the poor economic situation in Eurozone continued to weigh, results of a survey by the Centre For European Economic Research (ZEW) revealed Tuesday.
The ZEW indicator of economic sentiment rose marginally to 36.4 in May from 36.3 in April. This was notably below the score of 40 forecast by economists. The outcome was, however, better than in March, when the indicator fell by 12.2 points.
"Despite mostly positive economic data for the German economy, the ZEW Indicator remains at the level of the previous month," ZEW President Clemens Fuest said.
"This may be due to the still poor economic situation in the Eurozone, that is also reflected by the recent ECB interest rate cut," Fuest said.
The assessment of the current economic situation for Germany declined marginally in May. The corresponding indicator fell to 8.9 from 9.2 in April. The forecast was for a score of 9.8.
Nevertheless, the most recent survey by research group GfK showed that consumer confidence in Europe's largest economy is set to improve further in May.
A slew of indicators released this month signaled positive momentum in the economy, despite extreme weather conditions. Factory orders, industrial production and exports all increased in March, official data showed.
The Bundesbank said last month that the economy likely returned to growth in the first quarter of 2013 after a 0.6 percent contraction at the end of last year, provided the effects of the unseasonably cold winter remained contained.
ING Bank Economist Carsten Brzeski pointed out that the ZEW index's track record in the past with regard to predicting German economic activity has not been the best.
"With this in mind, today's data is encouraging for the growth outlook of the German economy," he added.
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