German investors more optimistic thanks to Brexit delay
Investors are more optimistic about the struggling German economy than they were a month ago, in a sign that Europe’s biggest economy may be about to turn a corner.
Read more: Eurozone manufacturing sector contracts with Germany shrinking fastest
German research institute ZEW’s monthly survey of sentiment among analysts swung into positive territory for the first time in a year, it said today, citing the Brexit delay as positive for the economy.
Germany's benchmark Dax stock index had risen 0.7 per cent shortly after 11.30am UK time, to reach 12,100.
The German economy has recently hit a difficult patch, with repercussions for Europe and the rest of the world.
Earlier this month the International Monetary Fund (IMF) said German GDP will grow just 0.8 per cent in 2019, meaning the organisation had cut its growth prediction for the country by over half since October in two consecutive downgrades.
The ZEW survey today returned a score of 3.1 for April compared to minus 3.6 in March, while economists had predicted a smaller increase to just 0.8.
A positive score means more analysts had positive expectations about mid-term economic development in Germany than had negative expectations.
Although the indicator still remains well below the long-term average of 22.2, economic expectations have recovered significantly from the low point in October 2018.
However, analysts’ assessments of the current situation in Germany deteriorated considerably in April, falling to 5.5, lower than March by 5.6 points.
ZEW president, Professor Achim Wambach, said: “The slight improvement recorded by the ZEW Indicator of Economic Sentiment is largely based on the hope that the global economic environment will develop less poorly than previously assumed.”
Read more: No-deal Brexit could tip UK and EU into recession, IMF says
“The postponement of the Brexit deadline may also have contributed to buoy the economic outlook. By contrast, the latest figures regarding incoming orders and industrial production in the German industry point to a rather weak economic development,” he said.