Private Consumption Will Continue to Boost German Economy

Germany’s economic confidence improved to an eight-month high and the assessment of current situation hit a record in January, indicating an optimistic outlook for the economy in the first half of the year.

The ZEW Indicator of Economic Sentiment rose three points to 20.4 in January, survey results from the Mannheim-based think tank ZEW showed Tuesday, Business Insider reported.

The score exceeded the expected level of 17.7 and was the highest since May, when the reading was 20.6. Nonetheless, the score was below its long-term average of 23.7.

Assessment of the current economic situation increased in January, with the corresponding index climbing 5.9 points to 95.2 points. The expected reading was 89.6.

With 95.2 out of 100 points, this is the most positive assessment of the current economic situation since the introduction of the survey in December 1991, ZEW President Achim Wambach, said.

Wambach noted that private consumption, which was the most important driver of economic growth in 2017, is likely to continue to stimulate growth in the coming six months according to the survey participants.

The assessment of the global economic environment in Europe and the USA is also much more favorable than it was at the end of 2017, Wambach added.

Data showed that the financial market experts’ sentiment concerning the economic development of the Eurozone improved in January. The corresponding indicator climbed 2.8 points to 31.8.

Likewise, the indicator for the current economic situation in the Eurozone strengthened in January, leaving the index at 56.4 points, up 5.7 points from December. The index for inflation expectations in the eurozone advanced 11.3 points to 57.5 in January.