Business climate in Germany improved for the second consecutive month

September 12, 2018 9:51 amComments Off on Business climate in Germany improved for the second consecutive monthViews: 11

Business climate in GermanyGerman analysts and investors attitudes about the prospects for the country’s economy in the coming months improved in September for the second consecutive month, with a view to further weakening fears of a major trade war with the United States, according to a recent study of the European Economic Research Center Zew.

The Zew index, measuring Germany’s future economic outlook for the next six months, rose by 3.1 points to -10.6 points in September, while average financial market expectations were a much modest improvement to -13.5 points.

This is a rebound for the second consecutive month from its 6-year bottom in July of -24.7 points (lowest level since August 2012). Despite the improvement, the index still remains in negative territory and well below its long-term average of 22.9 points.

At the same time, the index defining investors’ estimates of current conditions in Germany grew in September to 76.0 points from 72.6 points in August and above the average forecast for an index of 72.0 points.

“During the period, the currency crises in Turkey and Argentina increased, while German industrial production and incoming orders in July were surprisingly low”, said Achim Wambach, who is a head of Zew. “Despite these unfavorable circumstances, the economic expectations for Germany have improved slightly. The significant fears previously expressed by respondents have fallen weakly, partly because of the new US-Mexico trade agreement reached in August”, added he.

The expectations of financial market experts on economic developments in the Eurozone also improved, with the corresponding expectation index rising in September by 3.9 points to -7.2 points, while the indicator of the current economic situation in the region rose by 1.7 points to a level of 31.7 points.

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