The German economy is expected to log fairly strong growth rates in the second half, Commerzbank analyst Simon Junker said Tuesday.
The analyst said the track record of the ZEW economic sentiment indicator as a leading indicator for the German economy is no worse than that of the Ifo business climate index. The more than expected rise in the ZEW indicator in August supports the bank's forecast for a more positive GDP figures in the second half of the year.
Moreover, Junker said an important reason for the marked rise of ZEW economic expectations should lie in the recent positive economic data. Order intake in the industry, exports and, most recently, the second quarter GDP Q2 GDP: all came in much better than universally expected. This provided more fuel for hopes to an end of the recession and ensured a significant improvement in sentiment on the financial markets, where greater doubts had temporarily surfaced one month ago.
With regard to the future movement of the ZEW economic sentiment indicator, the Commerzbank analyst said, "We assume that the upward movement will continue with perceptible increases until this indicator reaches its 'normal' high of about 80 points this autumn."
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