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Mannheim-based ZEW said its monthly survey showed its economic
sentiment index rose to 12.8 from 10.4 points in the previous
month. This undershot the Reuters consensus forecast for rise to
13.1.
A separate gauge measuring investors' assessment of the
economy's current conditions edged up to 77.3 points from 76.4
in February. This was also slightly weaker than the Reuters
consensus forecast which predicted a reading of 78.0.
ZEW President Achim Wambach said the fact that sentiment only
improved slightly reflected the current uncertainty surrounding
the future economic development.
"With regard to the economic situation in Germany, no clear
conclusions can be drawn from the most recent economic signals
for January 2017," Wambach said.
German industrial output and exports rose more than expected in
January, data showed last week, suggesting Europe's economic
powerhouse started into 2017 on a solid footing despite the
threat of rising protectionism.
The surprisingly strong figures gave some reassurance that
Germany's economic upswing is likely to continue in 2017 after
industrial orders in January posted their biggest monthly slump
in eight years and retail sales also disappointed.
ZEW said investors' assessment of the current economic situation
in Germany remained at a very high level compared to many
previous years, but the research group also pointed to political
risks clouding the outlook.
"The political risks resulting from upcoming elections in a
number of EU countries are keeping uncertainty surrounding the
German economy at a relatively high level," Wambach added.
Far-right parties are expected to make a strong showings in
elections in the Netherlands on Wednesday and in France next
month.
Geert Wilders, who wants to "de-Islamicise" the Netherlands,
hopes clashes between Turkish-Dutch protesters and the police,
along with Ankara's accusations of Dutch "fascism", will help
bolster his chances of finishing first.
Wilders' Party for Freedom (PVV) has virtually no chance of
forming a government, given the splintered political landscape.
Other parties have ruled out a coalition with a party they view
as racist, but a PVV win would nevertheless send shock waves
across Europe.
(Reporting by Michael Nienaber; Editing by Joseph Nasr and
Dominic Evans)
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