German investors have slightly improved the economic outlook for the German economy as shown by a survey which asks respondents to rate the relative 6-month economic outlook for Germany.
The ZEW Indicator of Economic Sentiment rose slightly in December by 1.4 points minus 53.8. This slight increase marks the end of a nine-month downward trend. The current value is below the indicator’s historical average of 24.6 points.
Up to now, investor uncertainty due to the debt crisis in the eurozone has already been reflected by the negative balances of the ZEW Indicator of Economic Sentiment. In December the indicator’s negative balance still suggests that the economic situation in Germany will weaken over the next six months.
“The economic sentiment for Germany seems to have bottomed out,” says ZEW President. Dr. Wolfgang Franz. “Apparently, the financial market experts expect the economic activity to slow down, but not to plunge during the next six months. The decisions of the latest EU summit may have improved the experts’ expectations. Subject to a consensus on crucial details, these decisions are an important step towards an efficient institutional framework for the currency union.”
The index on the current economic situation remains positive though it has fallen for a fifth straight month. The indicator has dropped by 7.4 points to 26.8 points in December.