German investor sentiment stalls, but recovery intact

German investor sentiment stalls, but recovery intact

 

 

Frankfurt (AFP)

 

Investment sentiment in Germany stalled unexpectedly in January after rising to a seven-year high the previous month, but recovery of Europe's top economy remains intact, a survey found on Tuesday.

 

The widely watched investor confidence index calculated by the ZEW economic institute inched down by 0.3 point to 61.7 points in January, ZEW said in a statement.

 

Analysts had been pencilling in a further increase after the barometer hit its highest level in more than seven years in December.

 

But ZEW president Clemens Fuest insisted the latest reading was no real setback.

 

"Hovering at a high level, economic expectations for Germany have moved sidewards in this month's survey," he said.

 

"For months, the surveyed financial market experts have expected an economic upswing. In this month's survey the clearly improved assessment of the current economic situation seems to confirm these expectations," Fuest said.

 

For the survey, ZEW questions analysts and institutional investors about their current assessment of the economic situation in Germany, as well as their expectations for the coming months.

 

The sub-index measuring financial market players' view of the current economic situation in Germany rose by 8.8 points to 41.2 points in January, its highest level since May 2012.

 

Investor sentiment is "still going strong," said ING DiBa economist Carsten Brzeski.

 

The strong equity market and the possibility of further action by the European Central Bank "have clearly kept German investors in a positive mood," the expert said.

 

"The ZEW index has not the best track record when it comes to predicting German economic activity.

 

"However ... over the last years, the current assessment component has become a rather good leading indicator for GDP growth. In this regards, today's sharp increase of the current assessment component is good news for the economy," Brzeski said.

 

"The fundamentals of the German economy remain strong. With a solid labour market, higher real wages, the gradual investment pick-up, filled order books and low inventories the German economy seems to be in the starting blocks for a growth acceleration this year," he added.

 

Natixis economist Johannes Gareis agreed.

 

"If there is one message to take away from today's ZEW index, it is that German analysts and investors remain overly optimistic and believe in the robustness of the German economic recovery, which is in line with our scenario of a marked acceleration in economic growth in this year," Gareis said.

 

"All in all, the January data confirm our picture of an economic upturn in the euro area at the turn of the year," said BayernLB economist Stefan Kipar.

 

"The German economy is benefiting from this stabilisation in the euro area," he said.

 

(Agence France-Presse, 21 Tuesday January 2014 The Roman)

 

Photo caption (Brokers work at Frankfurt stock exchange on 6 September 2012 The Roman (AFP/File, Johannes Eisele))

 

German consumer confidence rises at year-end: survey

German consumer confidence rises at year-end: survey

 

Frankfurt (AFP)

 

Consumer confidence in Germany rose again during the busy Christmas period, auguring well for Europe's top economy as it goes into 2014, a new poll found on Friday.

 

"Consumer sentiment is very good at the end of 2013," market research company GfK said in a statement.

 

"Economic expectations and willingness to spend are continuing to rise. Income expectations have slipped, but are still at very high levels."

 

Overall, GfK's headline household confidence index was forecast to rise to 7.6 points in January from 7.4 points in December.

 

This reading is based on responses from about 2,000 households regarding their expectations about pay and the economy as a whole in the coming months, as well as their willingness to spend money.

 

Sentiment in Europe's top economy is currently very positive.

 

Earlier this week, the ZEW investor confidence index rose to its highest level in seven and a half years, and the Ifo business climate index hit a 21-month high.

 

Analysts nevertheless questioned whether consumer confidence would translate into higher retail sales.

 

"German consumers are becoming more confident as uncertainty fades. The GfK index is at its highest level since 2007," said Berenberg Bank economist Christian Schulz.

 

"Consumer confidence has been rising strongly since April 2013. However, strong consumer confidence has so far failed to translate into stronger hard consumption data," the expert said.

 

Retail sales had mostly disappointed and the consumption component of gross domestic product had only grown modestly so far in 2013, Schulz said.

 

Nevertheless, "with the economy turning up and the anticipation of a new national minimum wage of 8.50 euros introduced in 2015, we continue to expect German consumers to make a healthy positive contribution to GDP growth in 2014 and beyond," Schulz concluded.

 

(Agence France-Presse, 20 Friday December 2013 The Roman)