German investor sentiment surged in January as expectations increased that its powerful export machine will create new jobs and investments this year to spur further robust growth.
The Mannheim-based ZEW think tank said today its monthly index jumped to 15.4 points from a reading of 4.3 in December, its highest level since last July and easily surpassing the consensus forecast of 6.8 points in a Reuters poll of 36 economists.
"The German economy is cruising along safely. It looks as if there is almost blind trust in the strength of the German recovery," said ING Financial Markets economist Carsten Brzeski.
Germany has been among the most resilient of Western industrialised economies in the past year thanks to a strong export sector that supplies dynamic emerging markets with the goods needed to improve infrastructure and boost productivity.
Preliminary data showed Europe's largest economy expanded at the fastest pace since reunification in 2010 and forecasters believe Germany could grow for the second straight year, at an annual pace of more than 3 per cent.
Years of wage restraint paired with a weak euro has ushered in what some experts believe will be a decade of above-average growth for Germany, once overall household consumption starts to improve on the back of record high employment levels.
The country's relative prosperity last year, however, has triggered tensions among euro zone member states that feel Germany has unfairly kept a lid on wages at the cost of internal demand that could spur greater imports and growth elsewhere.
The ZEW's monthly index was based on a survey of 284 analysts and investors and conducted between January 3rd and January 17th.
Reuters