In a report, the ZEW Centre for Economic Research said that its index of German economic sentiment rose to 0.5 this month from July’s reading of minus 6.8 that had been its lowest level since November 2012.
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Achim Wamback, president of ZEW, said: “The ZEW Indicator of Economic Sentiment has partly recovered from the Brexit shock”.
“But “political risks within and outside the European Union”, as well as lingering “uncertainty about the resilience of the EU banking sector” continue to cloud Germany’s economic outlook”, he added.
The mood among German analysts and investors improved slightly in August, a survey showed on Tuesday, in a further sign that the impact of Britain’s decision to leave the European Union on Europe’s biggest economy could be limited.
Capital Economics analyst Jennifer McKeown pointed out that August’s recovery has not reversed the sharp fall in July.
The ZEW commented that expectations were recovering somewhat after the surprise United Kingdom decision to leave the European Union (EU), though there was still uncertainty surrounding the resilience of the EU banking sector. Increasing by 2.1 points, the indicator for the current economic situation reached a value of minus 10.3 points in August.
“The fact that the index is back in positive territory means that most investors now see German economic conditions improving in the next six months”. This seems more consistent with the message from equity markets and the positive tone of the business surveys for July. It dropped 19.9 points for Britain.
Bayern LB analyst Stefan Kipar also tempered optimism over the surveys.
Despite the improvement, some investors remain unconvinced that a recovery in financial markets since late June that propelled the DAX Index by some 15 percent is sustainable.
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“The German economy remains on a moderate growth path”.
