German Investor Confidence Highest In 4 Months In December - ZEW

(RTTNews) - Economic sentiment in Germany unexpectedly rebounded in December to its highest level in four months as financial market experts turned optimistic on the announcement of snap elections in February next year and the prospect of more interest rate cuts from the European Central Bank, results of a survey by the think tank ZEW showed Tuesday. The ZEW Indicator of Economic Sentiment for Germany improved surged to15.7 points from 7.4 in November. Economists had expected the reading to fall to 6.8. The latest reading was the highest since August when the score was 19.2.

The current conditions sub-index fell to -93.1 from -91.4 in the previous month. Economists had forecast a score of -92.6. "With snap elections ahead in Germany and the resulting expectations of an economic policy encouraging private investment as well as the prospect of further interest rate cuts, the economic outlook is improving," ZEW President Achim Wambach said.

"Our daily analyses also show that after the meeting of the European Central Bank's Governing Council on 12 December, experts still expect further interest rate cuts for the coming year."

"The fact that the majority of the survey respondents expect a stable or falling inflation rate in the eurozone supports this assessment," Wambach added.

Further, the ZEW President said experts appear to assess the recent rise in inflation as a temporary phenomenon.

Elsewhere on Tuesday, results of the ifo survey were downbeat, largely due to a slump in confidence among manufacturers.

The ifo business confidence index declined to 84.7 in December from 85.6 in November, defying economists' expectations for almost a steady outcome. The current conditions index of the survey improved, while the expectations measure slumped.

Economists are looking forward to modest growth of below 0.5 percent for the German economy next year.

The ZEW survey also showed that the economic sentiment index for eurozone gained 4.5 points monthly to reach a score of 17.0. However, the current situation indicator shed 11.2 points to a new reading of minus 55.0 points.