German investor sentiment climbed in March despite on-going coronavirus restrictions in Europe’s top economy, data showed on Tuesday.
The ZEW institute’s monthly barometer measuring economic expectations rose 5.4 points month-on-month to a new reading of 76.6 points — more than 20 points higher than in December.
It beat forecasts by analysts polled by Factset, who counted on a score of 75 points.
‘Experts expect a broad-based recovery of the German economy,’ said ZEW president Achim Wambach, based on hopes that 70 per cent of the German population would be vaccinated against COVID-19 by late September.
However, he warned that most of those polled for the ZEW survey were expecting ‘inflation to continue to grow, as well as higher long-term interest rates’.
In December, Germany tightened restrictions to curb the spread of the virus, closing most shops after a previous shutdown closed restaurants, bars, gyms and cultural activities.
This month, Germany reopened many schools, hairdressers and some shops, even as infection rates climb again in a third wave of the pandemic.
Contrary to during the first wave of the pandemic last spring, Germany’s current partial lockdown allows for factories and manufacturing businesses to remain open.
ZEW’s figure, based on a survey of 198 financial market experts carried out March 8-15, showed investor confidence in the eurozone up 4.4 points, to 74 points.
Alongside growing investor confidence, ZEW’s assessment of the current economic situation in Germany rose 6.2 points to minus 61 points — still deep in negative territory.
But the recent rise in new coronavirus cases raised doubts about a quick reopening of the economy.
‘The optimism of the financial market experts who were surveyed is easy to explain — the economic situation is so bad that looking ahead to the next six months, it can actually only get better,’ said economist Jens-Oliver Niklasch of LBBW bank.
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