ZEW investor confidence index recovers from August low as governments boost stimulus packages and IMF urges governments away from austerity
Investor confidence for Germany rose for a second straight month in October as governments in Europe and North America took action to stimulate economic growth and the IMF recommended governments temper austerity measures to help revive economies, according to the Centre for European Economic Research (ZEW).
The ZEW indicator of economic expectations for the next six months in Germany has increased 6.7 points to negative 11.5 points, according to a ZEW press release.
The rise follows a gain of 7.3 points in September, helping the index recover from the August level of negative 25.5 points, the lowest level of 2012.
‘The indicator’s rise shows that risks for the German economy have somewhat diminished according to financial market experts,’ ZEW reports.
‘This could well be explained by the decreasing uncertainty in the financial markets during the last weeks. Slightly more experts still expect the German economy to cool down instead of brightening up.’
While the economists and analysts surveyed in October take a less pessimistic view of the near future than they did in September, their assessment of the current state of the German economy has deteriorated, with the rating of the current economic situation falling 2.6 points to 10 points in October.
Still, Germany is the only country among the major economies included in ZEW’s survey to have a positive assessment of current conditions.
For the eurozone as a whole, investor confidence for the next six months has risen 2.4 points to minus 1.4 in October, according to the ZEW survey of 288 analysts between October 1 and October 15.
Their assessment of the current economic situation in the eurozone, however, has dropped 3.1 points to negative 71.4 points.
Except for Germany, the expectations for all major economies tracked by the ZEW confidence survey have declined, with the outlook for France dropping 6.8 points to negative 17.6, making it the biggest decliner and giving it the lowest outlook rating of the six economies tracked.
The UK suffers the next-biggest drop in investor expectations, falling 5.8 points to negative 6.9, while the outlook for the US has dropped 3.3 points to 6.2 points.
All major stock indices tracked by the survey, with the exception of the Dow Jones Industrial, rate positive outlooks.
While the outlook for the Dow Jones has fallen 1.1 points to 24.2 and the outlook for the FTSE 100 has declined 3.2 points to 11.2, the outlook for Germany’s DAX has risen 5.9 points to 23.5, making it the index with the biggest outlook improvement in October.
The next-biggest gainer is France’s CAC 40, rising 4.6 points to 9.5.
