German investor sentiment rose to its highest level in six months in January on expectations the incidence of COVID-19 cases will plunge by early summer.
- The ZEW economic research institute stated its economic sentiment index increased to 51.7 from 29.9 points in December.
- Achim Wambach, ZEW President, stated that the economic outlook had improved significantly with the start of the New Year. The majority of financial markets analysts project that economic growth will rebound in the coming six months.
- Wambach further stated that it is likely that the phase of economic weakness from the fourth quarter of 2021 will soon be overcome. The main driver for this is the projection that the incidence of COVID-19 cases will drop significantly by early summer.
The German economy was unable to bounce back to its pre-Covid-19 level in 2021 as microchip shortages hampered production in the car industry, and further pandemic restrictions slowed the recovery.
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