ZURICH (MaceNews) – The outlook for Germany’s economy improved in February, with consumption and retail trade being the main drivers, according to the latest report released by the Mannheim-based ZEW Institute.
The ZEW Indicator of Economic Sentiment rose to 71.2 in February, up 9.4 points from the January result, solidly exceeding the median forecast of 60 in an Econoday survey of economists.
“The financial market experts are optimistic about the future. They are confident that the German economy will be back on the growth track within the next six months. Consumption and retail trade in particular are expected to recover significantly, accompanied by higher inflation expectations,” ZEW President Professor Achim Wambach said in a statement accompanying the report.
At the same time, the view of the current situation fell 0.8 points to -67.2 and is “practically unchanged” from the same level over the past six months. The result was in-line with the Econoday median of -67.0.
The improvement in the outlook for Germany was also seen for the Euro-area as a whole with the Economist Sentiment Index up 11.3 points to 69.6. By contrast current conditions in the Euro-area were more favorable than in Germany, rising 4.3 points in the previous month to -74.6, according to ZEW.
Inflation expectations have “risen sharply” for both Germany and the Euro-area, up 15.3 and 20.2 points, respectively to 73.5 and 71.8, according to ZEW.
Germany’s IFO Institute will release its Business Climate Index on February 22.
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