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German ZEW economic sentiment index rises sharply in December

The German economic confidence rises sharply in December. The ZEW Indicator of economic sentiment rose sharply to 10.7 points, corresponding to a 12.8 point rise compared to the previous month and a 33.5-point rise compared to the October reading. This is the indicator’s highest value since February 2018. The assessment of the economic situation in Germany has also rebounded in the current December survey, while the corresponding indicator climbing to a level of -19.9 points, 4.8 points higher than in November.

Initially, the renewed sharp rise of the ZEW Indicator of Economic Sentiment might see surprising. It rests on the hope that German exports and private consumption will perform better than previously thought, noted ZEW President Professor Achim Wambach.

“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 labour market. The rather unfavourable figures for industrial production and incoming orders for October, however, show that the economy is still quite fragile”, commented Achim Wambach.

Meanwhile, euro area’s financial market experts’ sentiment has also rebounded significantly, bringing the indicator to a current level of 11.2 points for December, 12.2 points higher than in the previous month. The current economic situation indicator also rose considerably by 4.9 points, rising to a current reading of -14.7 points.

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