German analyst and investor confidence dips in March

| March 15, 2011

The Zew economic sentiment index has revealed German analyst and investor confidence unexpected fell in March - the first drop in five months.

The index, which measures expectations of economic activity over the next six months, dipped to 14.1 points from 15.7 in February.

Analysts had expected and represented a reading of 15.9.

The index was based on a survey of 284 analysts and investors and conducted earlier this month.

Commenting on the figures, Zew president Wolfgang Franz, said: “The German economy is in robust shape. Nevertheless, the tragic events in Japan could slow down the dynamics of German economic growth at least in the short run.”

The dip was attributed to the European Central Bank suggesting it may raise interest rates in the short-term to combat rising inflation, as well as last week’s massive earthquake in Japan, which has sent global stocks plummeting.

However, despite the slight fall in the index, Germany continues to lead the recovery in Europe and one analyst described the economy as “strong and very solid”.

Export demand helped to bring Germany out of recession in the second quarter of 2009 – much sooner than many of its counterparts throughout the world.

The economy is expected to grow 2.5% this year after posting record growth of 3.6% for the 2010 year.

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