Investor confidence in Germany’s growth outlook improved for a fifth straight month as global risks subsided, suggesting Europe’s largest economy will shake off its weakness as the year progresses. A gauge measuring prospects for the next six months rose to minus 3.6 in March, the highest in a year, beating an estimate for a gain to minus 11. Despite the streak of improvement, the negative reading means pessimists still outnumber optimists among survey participants.
“Major economic risks are considered to be less dramatic than before,” ZEW President Achim Wambach said. “The possible delay in the Brexit process as well as the renewed hope for a deal on the UK’s withdrawal from the EU seem to have given rise to more optimism among financial market experts.
Progress made in the negotiations between China and the US to end the trade war between the two nations may also have contributed.” Some 26.9 percent of respondents said that the outlook for the German economy improved, compared with 30.5 percent who saw a deterioration. Investors were most pessimistic about the car industry, steel manufacturing and banking.
The Bundesbank gave up hope for a near-term rebound in Europe’s largest economy, saying in a report that German industry continued to stumble and growth momentum remained subdued in the first quarter. The German government’s independent council of economic advisers slashed its growth forecast for this year, citing weaker demand in key export markets, and argued that the economic boom is “over for now.”