German investor confidence improves less than expected

German investor confidence improved less than expected in August, according to the latest survey from the ZEW Center for European Economic Research in Mannheim.

The index of investor and analyst expectations rose to 0.5 in August from -6.8 the month before, but this fell short of estimates for a reading of 1.8.

However, the current expectations index beat economists’ forecasts for a reading of 50.0, printing at 57.6 from 49.8 in July.

ZEW President Professor Achim Wambach said: “The ZEW Indicator of Economic Sentiment has partly recovered from the Brexit shock. Political risks within and outside the European Union, however, continue to inhibit a more optimistic economic outlook for Germany.

“Furthermore, uncertainty about the resilience of the EU banking sector persists.”

Jennifer McKeown, European economist at Capital Economics, said: “August’s German ZEW investor survey shows that sentiment has partly recovered from July’s Brexit-related decline, but it still points to a slowdown in German GDP growth.

“The fact that the ESI is back in positive territory means that most investors now see German economic conditions improving in the next six months. This seems more consistent with the message from equity markets and the positive tone of the business surveys for July. However, sentiment has not fully reversed July’s drop and it is lower than at any other point since October 2014.”