German economic sentiment rebounds as global macro outlook improves

Economists, analysts and finance professionals turned more positive about the outlook for the Germany economy this month, according to the closely watched ZEW Indicator of Economic Sentiment on Tuesday.

The index, which tracks the sentiment of around 350 experts each month, rose to 13.1 in October, up from an 11-month low of 3.6 in September.

This was ahead of the consensus estimate of 10 but not as high as the 19.2 level registered in August.

The monthly increase was the result of an improving outlook, since the current situation index dropped to -86.9, down from -84.5 the month before and the lowest level since the May 2020.

“Starting from a very poor assessment of the current situation, the economic sentiment for Germany has risen in the latest survey," said ZEW president Achim Wambach.

"Contributing factors include the expectation of stable inflation rates and the associated prospect of further interest rate cuts by the ECB. Positive signals are also coming from Germany’s export markets."

Wambach said that the economic outlook across the eurozone, the US and China has "significantly improved", with the latter likely a result of the government's bumper stimulus measures announced in recent weeks.