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German ZEW Economic Confidence Strengthens More Than Expected

germanyeconomic oct16 19jan21 lt

German economic sentiment improved more-than-expected in January despite the uncertainty over the further course of the lockdown, survey data from the ZEW - Leibniz Centre for European Economic Research showed on Tuesday.

The ZEW Indicator of Economic Sentiment climbed 6.8 points to 61.8 in January. The reading was above the expected level of 60.0.

At the same time, the current situation index rose slightly to -66.4 from -66.5 in December. The expected level was -68.5.

"The results of the ZEW Financial Market Survey in January show that export expectations in particular have risen significantly," ZEW President Achim Wambach commented on the current expectations.

In the monthly report, released Monday, Bundesbank said the recovery will face significant setback if the rate of coronavirus infections fails to ease and the lockdown restrictions are subsequently extended.

Official data showed that Germany's GDP decreased 5 percent in 2020, almost reaching the level of 2009, when economic output fell by 5.7 percent as a result of the global financial and economic crisis.

The survey today showed that the financial market experts' sentiment concerning the economic development of the euro area increased 3.9 points to 58.3 points in January. In contrast, the indicator for the current economic situation decreased 3.2 points to minus 78.9 points.

Inflation expectations for the Eurozone gained 10.9 points to a new indicator value of 51.6 points. At the same time, the inflation indicator for Germany came in at 58.2 points in January, up by 18.6 points from December 2020.

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