German investor sentiment strengthened for the fifth consecutive month in March to its highest level in a year, a closely watched survey revealed Tuesday. Nonetheless, the improvement was weaker than expected, suggesting that concerns over the Greek crisis impacted optimism.
The economic sentiment indicator climbed to 54.8 from 53 in February, survey data from the Centre for European Economic Research, or ZEW, showed Tuesday.
It was the highest value of the index since February 2014. Economists had expected a higher score of 59.4.
The current conditions index rose sharply to an 8-month high of 55.1 from 45.5 in the previous month. Economists had forecast a score of 52.
The improvement in current conditions adds to signs that the economic recovery should continue in the near term at least, no doubt supported by the euro’s depreciation, Jennifer McKeown, a senior European economist at Capital Economics said.
“Economic sentiment in Germany remains at a high level. In particular, the continuing positive development of the domestic economy confirms the expectations of the experts,” ZEW President Clemens Fuest said.
At the same time, limited progress is being made with regard to solving the Ukraine conflict and the sovereign debt crisis in Greece. This has a dampening effect on sentiment, Fuest noted.
The investor sentiment index for the euro area added 9.7 points to 62.4 in March. The current conditions index for the region gained 11.8 points to minus 36.6.
According to the latest European Central Bank staff macroeconomic projections, the 19-nation bloc is set to expand 1.5 percent this year and by 1.9 percent in 2016.
The ECB announced a massive $1.1 trillion quantitative easing in January to avoid deflation and boost economic growth.
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