German investor confidence rebounds

22nd June 2004, Comments 0 comments

22 June 2004 , BERLIN - German investor confidence rose in June amid hopes that Europe's biggest economy is on the path to an upswing, according to a key economic indicator released Tuesday. Compiled by the Mannheim-based Centre for European Economic Research, the so-called ZEW index rose for the first time in six months to 47.4 in June after dropping to 46.4 points in May. The rise in the indicator came in the wake of the release of a series of key economic data, in particular exports, underscoring that r

22 June 2004

BERLIN - German investor confidence rose in June amid hopes that Europe's biggest economy is on the path to an upswing, according to a key economic indicator released Tuesday.

Compiled by the Mannheim-based Centre for European Economic Research, the so-called ZEW index rose for the first time in six months to 47.4 in June after dropping to 46.4 points in May.

The rise in the indicator came in the wake of the release of a series of key economic data, in particular exports, underscoring that recovery in Germany was taking hold.

Nevertheless, ZEW president Wolfgang Franz expressed disappointment about the June outcome with worries about high oil prices and the threat of inflation leading to a hike in interest rates still casting a shadow over economic sentiment in Germany.

"While it is good news that the downward trend in the economic sentiment has stopped for the present, hopes of a marked pickup have not been fulfilled, though some fundamental data point to an economic recovery," he said in releasing the institute's latest survey.

Indeed, the rise in June was marginally below the 47.5 points forecast by economists this month.

Based on a survey of 310 institutional investors and analysts, the ZEW survey acts as a curtain raiser to the release Friday of the more broadly based and closely watched German Ifo business confidence survey.

With an economic pickup in the U.S. and Asia helping to underpin Germany's key export machine, analysts have also been predicting a rise in the Ifo index to 96.5 points in June from 96.1 points in May.

The ZEW said that its indicator continued to signal cautious optimism for a further economic recovery with buoyant export demand, strong foreign orders as well as a calmer oil market helping to offset worries about energy costs.

Combined with increasing industrial production and better-than- expected labour market data, the ZEW said that those responding to the survey were now less pessimistic about current economic conditions in Germany.

Compared to -75.9 points last month, the indicator of the current economic conditions increased to -69.8 points.

But as a reminder of the fragile state of the recovery in the 12-member eurozone, the ZEW report showed economic sentiment for the currency bloc slipping in June with the indicator dropping from 59.2 points to 56.8 points.

However, investors appeared more confident about the eurozone's current economic conditions with the indicator rising from -50.6 points to -45.0 points.

DPA

Subject: German news

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