German investor confidence rebounds in September

Confidence among German investors rebounded strongly in September, wiping out a sharp fall the previous month, although investors remain gloomy about growth prospects in the months to come, a survey showed Tuesday.

The Mannheim-based ZEW institute said its headline monthly index, which measures economic expectations, gained 21.6 points to reach -22.5 in September — beating analysts’ forecasts.

This month’s increase “does not mean we can sound the all-clear about the development of the German economy in the coming half year,” ZEW chief Achim Wambach said.

The result remains far below the long-term average of 21.5 points.

And looking elsewhere in the survey, investors’ view of the present economic situation in Germany darkened, falling 6.4 points to 19.9 and disappointing forecasts.

Gross domestic product shrank in Europe’s powerhouse economy by 0.1 percent in April-June and could contract again in the third quarter, as protectionism, emerging market woes and geopolitical tensions weigh on its export-oriented model.

Looking ahead, “prospects remain negative,” Wambach said, although none of the potential crises for the German economy — such as a deepening of the US-China trade conflict or a no-deal Brexit — have yet erupted.

“What’s more, the European Central Bank is trying to reduce economic risks in the eurozone with a fresh loosening of monetary policy” at a meeting last week, he added.

In a separate survey of the wider 19-nation eurozone, ZEW’s index showed a similar surge in September in the outlook for the coming months, as well as a slight fall in the assessment of the current situation.

ZEW compiled its results from a survey of 193 analysts and institutional investors.