German investor confidence rises unexpectedly

Tuesday 19 March 2013 12.27
ZEW institute's monthly index rose to 48.5 points in March
ZEW institute's monthly index rose to 48.5 points in March

Investor confidence in Germany unexpectedly edged higher this month as hopes held up that growth in Europe's biggest economy will return, a closely watched survey showed today.

The ZEW institute's index, which measures investors' outlook for the next six months, rose to 48.5 points in March from 48.2 in February.

It was the fourth consecutive monthly increase and contrasted with economists' prediction of a decline to 47.5.

Market experts are sticking to their forecast that "the economic situation in Germany is likely to improve over the next months," said the institute's president, Clemens Fuest.

"As before, the euro zone debt crisis remains the biggest risk. This fact has been brought back to our attention over the last weeks," he added.

ZEW said it surveyed 245 analysts between March 4 and yesterday - a period that covers the time after Italy's indecisive election but only the beginning of the fallout from a much-criticised bailout deal for Cyprus.

The German economy shrank in last year's final quarter but is expected to return to growth in the current quarter - avoiding a recession. Business confidence has been rising and the DAX, Frankfurt's index of blue chip stocks, this month hit its highest level in more than five years.