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German investor sentiment

May 14, 2013

Institutional investors in Germany have appeared unfazed by the eurozone debt crisis. The latest sentiment index compiled by the ZEW think tank indicated their optimism was unharmed in May.

https://p.dw.com/p/18XMM
Brewery in Bavaria, Germany
Image: Bayerische Staatsbrauerei Weihenstephan

A good deal of optimism returned to analysts and institutional investors in Germany in May as they revealed a positive take on economic developments in their country.

A widely watched sentiment index by the Mannheim-based Center for European Economic Research (ZEW) on Tuesday showed a fractional rise by 0.1 points to 36.4 points this month, reflecting investors' hope that the worst of the eurozone debt crisis was over.

ZEW questioned analysts about their current assessment of the economic situation in Germany as well as their expectations for the coming months.

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Positive outlook

"After a sharp decline last month, the ZEW indicator has moved sideways," the think tank said in a statement. Although market pundits had penciled in an even better result, they acknowledged the ongoing financial problems in many fellow euro area nations.

ZEW said the fractional improvement showed "the poor economic situation in the eurozone" which it said was also reflected by the recent interest rate cut by the European Central Bank (ECB).

"The positive development at the stock exchange and gratifying industrial date from Germany could have prompted an even more optimistic assessment by the investors polled," Postbank economist Thilo Heidrich commented. "But you can also read from the figures that analysts are expecting the economic situation to stabilize further."

hg/dr (AFP, Reuters)