German economic confidence strengthened for the second straight month to a four-month high in April on easing concerns over China, survey results from the ZEW-Centre for European Economic Research showed Tuesday.
The Indicator of Economic Sentiment rose by a more-than-expected 6.9 points to 11.2 in April, the Mannheim-based think tank said. The reading was forecast to rise to 8.0. This was the highest score seen so far this year.
"Surprisingly positive economic news from China seem to have improved the sentiment amongst financial market experts," Sascha Steffen, head of the research department at ZEW, said.
"On balance, however, the continued poor growth in China and other important emerging markets continues to be a burden for the German export industry," Steffen, noted. Concern about Great Britain's possible exit from the EU seems to be having a negative impact.
The current situation index fell unexpectedly by three points to 47.7 points in April. The expected score was 50.8.
The Bundesbank yesterday cautioned that the German economy may lose momentum in the second quarter largely due to sluggish new orders and weak business expectations.
In its monthly report, the bank said the largest euro area economy grew strongly in the first quarter. Domestic factors contributed to growth, while exports remained relatively weak in the first quarter.
Jennifer McKeown at Capital Economics said German GDP growth is likely to slow slightly to 1.2 percent this year. Fears that ECB monetary policy is much too loose for the Eurozone's largest economy are overblown, the economist added.
Financial market experts' expectations on development in the euro area improved in April, survey showed today. The economic confidence index rose 10.9 points to 21.5 in April. Meanwhile, the indicator for current situation dropped slightly by 0.3 points to -12.1.
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