GERMANY - Institutional investors continue to remain upbeat about the state of the Germany economy, according to a German research centre.
The Centre for European Economic Research (ZEW) Indicator of Economic Sentiment, derived from the ZEW Financial Market Survey, rose to +50.2 points in February.
The scale operates from -100 to +100. In January 2000 confidence was at a high of +90. From January 2001 to July 2001 confidence was in negative territory.
In February, 324 analysts and institutional investors participated in the ZEW Financial Markets Survey which is conducted monthly by Mannheim-based ZEW.
More than half of the participants expect an improvement in the German economy over the next six months. Therefore, the indicator currently does not support those who argue that the economy might face a ‘double-dip’ with growth reversing in the second half of the year.
The participants were asked about their medium-term expectations concerning economic activity and capital markets.
In line with the positive expectations concerning the economy is the significant decline of analysts expecting further rate cuts by the European Central Bank. By now, 60% anticipate short term interest rates to remain unchanged over the next six months. But, in January a majority of analysts expected the ECB to cut rates once more.
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