German economic confidence rises past forecasts in September, ZEW says
Financial experts turned more optimistic on the outlook for the German economy, according to the results of one of the most widely-followed surveys, despite recent strength in the European single currency.
The ZEW institute's economic confidence gauge turned higher by 7.0 points in September to reach a reading of 17.0, well in excess of the 12.0 most economists had forecast.
Although the index remained below its long-term average reading of 23.8, ZEW said in a statement that: "The solid growth figures in the second quarter of 2017 in combination with a steep rise in bank lending and increasing investment activities by both the government and private firms are likely reasons for the financial market experts' significantly more positive outlook compared to that of last month."
That was further corroborated by "stable" developments in the global economy, according to the research institute, with the federal elections not having become a source of uncertainty either.
As regards the euro, ZEW said for now it had also "faded" into the background.
A separate index tracking experts' assessment of the current situation in the euro area's largest economy on the other hand was little changed, up by 1.2 points at 87.9.
In contrast, a rival sub-index linked to the current situation in the Eurozone slipped by 2.9 points to 35.5, with another referencing expectations for the bloc up by 2.4 points to 31.7.
"But note that the ZEW has been an unreliable indicator of the pace of growth. What is probably more important is the fact that the ESI is marginally above its year-to-date average of +15.9. This suggests that investors’ perceptions of the economic outlook have not changed materially this year, despite the euro’s rise and other factors such as the German emissions scandal and geopolitical concerns regarding North Korea," observed Stephen Brown, European economist at Capital Economics.