Survey: Economic sentiment improves in Germany

[June 16, 2009]  BERLIN (AP) -- Economic confidence in Germany, Europe's largest economy, improved for an eighth straight month in June, with a recovery from recession expected to come around the end of the year, a closely watched survey showed Tuesday.

The Mannheim-based Center for European Economic Research, known by its German initials ZEW, said its economic sentiment indicator rose by 13.7 points in June, to 44.8 points from 31.1 the previous month.

The agency said the ongoing recovery of its indicator reveals a "consolidating optimism among the financial market experts, even though the industrial production and incoming orders do not yet show a clear upward trend."

Germany went into a recession in last year's third quarter.

Last week, the German Institute for Economic Research, or DIW, revised its forecast for German economic output, saying it would drop 7 percent in the second quarter -- worse than previously predicted.

The government has said it expects a contraction for the year of 6 percent, while the central bank, the Bundesbank, has predicted the economy will contract by 6.2 percent.

Still, the ZEW said their survey shows that businesses are now optimistic about the future.

"The assessment of the experts indicates that the economic downturn dynamics are currently coming to rest," said ZEW president Wolfgang Franz.

"They further see tendencies for a recovery at the end of this year. This cautious optimism should not be destroyed by overly pessimistic projections."

[Associated Press]

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.