German Economic Sentiment Strongest Since 2022

(RTTNews) - Investor confidence in Germany improved sharply to the highest level in more than three years in March on strengthening expectations regarding fiscal policy, a closely watched survey published by think tank ZEW showed Tuesday.

The ZEW Indicator of Economic Sentiment climbed to 51.6 in March from 26 in February. The last time this indicator posted such a substantial increase was in January 2023. The reading hit the highest since February 2022 and was also well above economists' forecast of 43.6.

The current situation indicator rose only marginally in March, climbing to -87.6 from -88.5 in the previous month.

"The brighter mood is likely due to positive signals regarding the future German fiscal policy, for example the agreement on the multi-billion-euro financial package for the federal budget," ZEW President Achim Wambach said.

Further, Wambach noted that the sixth consecutive interest rate cut by the European Central Bank means favorable financing conditions for private households and companies.

Sentiment concerning economic development in the euro area also strengthened in March. The economic sentiment index advanced 15.6 points to 39.8.

At the same time, the assessment of the current economic situation was quite stable. The index posted -45.2, which was up by 0.1 point from February.