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German Investor Outlook Improves Most in Two Years Before Vote - BLOOMBERG
(Bloomberg) -- Investor confidence in Germany’s economy improved by the most in two years, with elections this weekend set to produce a more market-friendly government and interest-rate cuts bolstering demand.
The ZEW institute’s index of expectations rose to 26 in February from 10.3 in January — more than economists had forecast. A measure of current conditions rose, but by less.
“This rising optimism is probably due to hopes for a new German government capable of action,” ZEW President Achim Wambach said Tuesday in a statement. “Also, after a period of absent demand, private consumption can be expected to gain momentum in the next six months.”
The economy has been at the center of Germany’s election campaign, with the likely next chancellor, Friedrich Merz, promising to rekindle growth by reducing taxes, regulation and social handouts. Europe’s biggest economy contracted for a second straight year in 2024 and is expected to tread water in 2025.
Germany’s export-oriented manufacturing sector is chiefly responsible for the malaise, suffering from weak demand in China, high energy costs and geopolitical uncertainty. While a gauge of activity has improved recently, it still signals declining output.
