Germany's economic morale at 1-year high

Germany

ZEW indicator of economic sentiment reaches 19.9 points in February thanks to prospects of rate cut from major central banks in 1st half of this year.

Germany's economic morale further improved to a one-year high in February amid hopes that borrowing costs this year will drop, according to data released on Tuesday.

The ZEW Indicator of Economic Sentiment for Germany this month rose to 19.9, a jump of 4.7 points from the previous month, above market forecasts.

"More than two-thirds of the (survey) respondents expect the ECB (European Central Bank) to make interest rate cuts over the next six months in light of falling inflation rates. Almost three-quarters of respondents expect imminent interest rate cuts by the American central bank," or Federal Reserve, said ZEW head Achim Wambach.

An index of current conditions in Germany, on the other hand, dropped 4.4 points to minus 81.7 points in February, its lowest level since June 2020.

The ZEW indicator of economic sentiment for the euro area increased 2.3 points from a month ago to 25 in February.

The situation indicator for the eurozone climbed 5.9 points to minus 53.4 points.