By Marco Babic
ZURICH (MaceNews) – In a sign that the worst might be over for Germany’s economy, both current economic conditions and outlook improved in June, according to the ZEW institute in Mannheim.
The Economic Sentiment Economic Index rose to 63.4 in June, improving 12.4 points from May. While current conditions improved by 10.4 points in June, the first increase since January, the index remains deep in negative territory at -83.1. Even so it was the first time both readings improved this year.
“There is growing confidence that the economy will bottom out by summer 2020. This is reflected in the renewed rise of the ZEW Indicator of Economic Sentiment as well as the more optimistic assessment of the current situation,” ZEW President Professor Achim Wambach said as the report was released on Tuesday.
The numbers add to signs that while the economy is still suffering the coronavirus impact, there are some positives for an improvement in production in May.
Industrial production in Germany contracted 17.9% in April from the previous month and fell 25.3% from a year ago as the coronavirus continued to have a negative impact.
The Federal Statistics Office’s (Destatis) Truck Toll Mileage Index for May showed a 6.1% increase over April. The index measures truck mileage on vehicles with four or more axles which are subject to tolls. The office said there is “a strong correlation between truck mileage and industrial production in Germany.”
The closely watched IFO business sentiment index rose to 79.5 in May from 74.2 in April while current conditions fell and expectations rose. The release of June data on June 24 will give a further context to see if both current conditions and expectations also rose.