European Central Bank decision to buy government bonds helped lift sentiment across Germany, eurozone, ZEW survey indicates
Economic sentiment for Germany rose for the first month in five in September after the European Central Bank indicated it would buy government bonds to help resolve the eurozone’s debt crisis, according to the ZEW Centre for European Economic Research.
The ZEW indicator of economic expectations for the next six months in Germany rose 7.3 points in September after falling for every month since May, according to the ZEW survey.
The index now stands at negative 18.2 points, from negative 25.5 points last month and positive 23.4 points in April, the year’s high.
The outlook for the eurozone as a whole improved by 17.4 points to negative 3.8 points after rising 1.1 points last month and declining by 2.2 points in July, according to the ZEW survey of 263 analysts between August 31 and September 17.
`The European Central Bank’s announcement to purchase government bonds, which is a problematic decision, might nevertheless have contributed to the improvement of the economic sentiment,’ says ZEW president Wolfgang Franz, in a statement. `However, the debt crisis is not solved yet, and the risks for economic activity remain.’
Analysts’ assessment of the current economic situation in Germany, meanwhile, worsened, sending that indicator down 5.6 points to positive 12.6, ZEW says. The assessment of the current situation in the eurozone fell 1.2 points to minus 76.3.
The outlook for Italy rose the most among individual countries covered by the indicator, gaining 21 points in September to minus 7.6, followed by the 16.6 points gained by France, which rose to minus 10.8.
However, all countries covered by the survey remained in a negative value for the month, except for the US, which climbed 5.1 points to 9.5 in the positive.
The assessment of the current economic situation was bleakest for Italy, which stood at minus 88.3 points in September even after rising 0.7 from the previous month. Second worst was the UK, at minus 67.6 points after a 4.8-point climb.
Germany was the only country with an assessment in positive territory. The indicators reflect the difference between the percentage of analysts who have positive outlooks and those who have negative outlooks.
The outlook for stock market indexes was more mixed, with analysts expecting declines in German’s DAX, the Dow Jones Industrial and Japan’s Nikkei 225. Analysts saw little change in the euro zone’s Stoxx 50 and growth in the main indices of the UK, France and Italy.
Analysts’ expectations for banking showed the greatest improvement among sector-specific indicators, rising 19.6 points in September to minus 35.6, while the automobile sector showed the greatest deterioration in expectations, falling 7.9 points to minus 40.6.
