Germany, the economic powerhouse of the EU project, reported some positive economic news on Tuesday.
Confidence in the German economy amongst German investors grew in June. The ZEW economic research institute – (Zentrum für Europäische Wirtschaftsforschung) Economic Sentiment Index – reported that its economic sentiment index increased to -28.0 points this month from the -34.3 recorded in May.
The June reading came in better than markets had expected with a Reuters poll predicting a reading of -27.5 in June.
ZEW President Achim Wambach said of the latest data:
“The economy is still exposed to numerous risks, such as the effects of the sanctions against Russia, the unclear pandemic situation in China, and the gradual change of course in monetary policy,”
“So although expectations have improved, they are still deep in negative territory,”
An index that measures current conditions increased to -27.6 from -36.5. The data was better than the consensus forecast for a reading of -31.0.
Confidence Better, But Risks Remain
The latest data on confidence within the German economy shows that it is less pessimistic than before. However, confidence is still well within negative territory and the German business community is fully aware of how fragile both the German economy and the wide EU economy are.
Based on the recent Bundesbank predictions released last Friday, the GDP of Germany, the world’s fourth-largest economy and the largest in the EU, is expected to rise by 1.9 percent in the current year. However, much will depend on ECB stimulus that will be introduced to combat the near rampant inflation impacting global economies.
