Investor confidence in Germany unexpectedly soared to a 20-year high in September despite a resurgence in coronavirus cases and Brexit tensions, a key survey showed on Tuesday.
The ZEW institute’s monthly barometer measuring investor expectations in Europe’s largest economy leapt to 77.4 points, the highest reading since May 2000.
The figure marked a rise of 5.9 points from August, when confidence hit a near 17-year high.
The reading surprised analysts who were expecting a fall in German investor confidence to 70.0 points this month, according to a survey by FactSet.
‘Experts continue to expect a noticeable recovery of the German economy’ following the pandemic-induced shock earlier this year, ZEW president Achim Wambach said in a statement.
‘Stalled Brexit talks and rising Covid-19 cases could not dampen the positive mood.’
However, a still negative outlook for the banking sector reveals concerns of a rising number of loan defaults in the coming six months, he warned.
In March, the survey by Mannheim-based ZEW crashed to its lowest rating since the 2008-9 financial crisis as coronavirus lockdowns started to batter the economy.
But confidence has improved from April onwards after the country emerged from the restrictions, and the German government rolled out large fiscal stimulus to cushion the economic blow.
Earlier in September, economy minister Peter Altmaier said Germany was experiencing a V-shaped recovery. He also ruled out new nationwide lockdowns, despite coronavirus cases ticking up in recent weeks.
The government expects the German economy to shrink by 5.8 per cent in 2020, taking a smaller hit than many other large European economies such as France and Italy.
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