Tuesday 10 December 2019 1:36 pm

German investor morale unexpectedly climbs

German investors were much more upbeat than expected in December, a survey has shown, with recent economic data fuelling hopes for an uptick in Europe’s biggest economy.

The index of economic morale from research institute ZEW picked up to 10.7 this month from minus 2.1 in November. The score was well above expectations of a zero reading.

Read more: Eurozone PMI: Economy stagnates in November amid prolonged Brexit uncertainty

Growth has been poor in Germany in 2019, with the country only narrowly avoiding recession in the third quarter. US-China trade tensions, the Brexit debacle, and tough new car emissions tests have all been blamed for the slowdown.


However, data on Monday showed that German exports rose unexpectedly in October, cheering gloomy investors.

Achim Wambach, president of ZEW, said the morale boost “rests on the hope that German exports and private consumption will develop better than previously thought”.

He added: “This hope results from a higher-than-expected German foreign trade surplus in October, alongside relatively robust economic growth in the EU in the third quarter and a stable German labor market.”

A separate ZEW gauge of investors’ views of the economy’s current position climbed to to minus 19.9 from minus 24.7 in the previous month, beating analysts’ forecasts of minus 22.3.

Investor morale in the Eurozone as a whole also picked up. ZEW’s pan-European gauge climbed to 11.2 in December from a minus one reading in November.

Read more: Moody’s downgrades outlook for German banks to negative

However, Andrew Kenningham, chief Europe economist at consultancy Capital Economics, said: “Hopes that the euro-zone is turning a corner look premature.”


“The latest activity data have been disappointing, with retail sales falling in October and national data pointing to another decline in industrial output.”

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