German investor confidence rose sharply in January, a closely watched survey today showed. This suggested that Europe's top economy remains resilient to the crisis causing chaos in the euro zone.
The ZEW think-tank's economic expectations index rose by a whopping 32.2 points in January to stand at -21.6 points, the organisation said.
The result shattered the estimates of even the most optimistic forecasters surveyed by Dow Jones Newswires. On average, analysts had expected a slight increase to -49.5 points from last month's -53.8 points.
"Contrary to repeatedly expressed fears of a recessio,n the assessment of the financial market experts gives reason for cautious optimism that Germany will only experience a dent in economic activity," ZEW head Wolfgang Franz said.
"Nonetheless, the further development of the debt crisis remains a risk to economic growth," Franz added.
Despite the spectacular jump, the survey remained well below its historical average of 24.5 points. "This months increase suggests that within the next six months, German economic activity is likely to stabilise instead of deteriorating further," said Franz.
For the survey, ZEW questioned 293 analysts and institutional investors on their view of the economy.
