FRANKFURT AM MAIN: Investor sentiment in Germany eased in February, a survey found on Tuesday, but not enough to dent the overall positive outlook for Europe’s biggest economy, analysts said.
The ZEW economic institute’s monthly barometer shed 2.6 points to 17.8 points this month, but still came in well above the 15.0 points forecast by analysts surveyed by Factset.
Despite the drop, “the latest survey results show an unchanged positive outlook for Germany,” ZEW president Achim Wambach said.
“The very good performance of the global economy and private consumption are important pillars of growth in Germany,” he said.
A breakdown of the monthly poll, which surveyed 211 analysts and investors, showed their assessment both of the current economic situation in Germany and the outlook for the coming months declined.
ZEW also calculates a barometer for investor sentiment in the wider eurozone and here, the assessment of the current economic situation improved, while investors’ expectations for the coming months slipped slightly.
The German economy clocked up growth of 2.2 percent last year, its fastest pace since 2011, according to official data released in January.
Analysts and government economists predict the pace of expansion could be maintained or pick up still further this year, as the global economy surges and upbeat German consumers keep up high levels of spending.
With higher growth, “inflation expectations for Germany and the eurozone are increasing,” Wambach said.
Financial players expect central banks like the US Federal Reserve and the European Central Bank to react to higher inflation by increasing interest rates in future — one reason why financial markets saw a sharp downward correction in early February.