Financial News: German Investor Sentiment Rebounds Ahead Of Federal Electi

German Investor Sentiment Rebounds Ahead Of Federal Election: ZEW

02/18/2025 - 07:43:00 (RTTNews)

(RTTNews) - German economic confidence logged its strongest improvement in the past two years in February ahead of the federal election as financial experts expect fiscal stimulus from the new government and also foresee better outlook for construction on the back of interest rate cuts, results of the closely watched survey by the think tank ZEW showed on Tuesday.

The ZEW Indicator of Economic Sentiment surged 15.7 points to a seven-month high of 26.0 in February. The reading remained well above forecast of 19.9.

Financial market experts' assessment about the current situation also improved in February. The corresponding index rose slightly by 1.9 points to -88.5.

The rising optimism was probably due to hopes for a new German government capable of action, ZEW President Achim Wambach said.

Moreover, private consumption is expected to gain momentum over the coming six months after a period of absent demand.

The president said the latest interest rate reduction by the European Central Bank in response to sluggish economic activity have contributed to the better outlook for the construction industry.

Last month, the <a href=https://www.rttnews.com/3507772/ecb-to-cut-rates-again-as-lagarde-sees-disinflation-well-on-track.aspx target=_blank >ECB cut its interest rates</a> for a fourth policy session to its lowest level in two years as the disinflation process remain well on track and suggested more easing going forward.

Economic confidence in the euro area also strengthened in February. The corresponding index moved up 6.2 points to 24.2. At the same time, the current situation index climbed 8.5 points to -45.3.

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