German investor sentiment rose to 34.2 points in August, well above the 30.0 points analysts had forecast, the ZEW economic research institute reported. The gain builds on stronger quarterly results and export orders, even as record-low Rhine River levels and elevated energy costs continue to weigh on Europe's largest economy.
German investor morale rose more than expected to 34.2 points in August, the ZEW economic research institute said Tuesday. Analysts polled by Reuters had expected the reading to rise to 30.0 points from 26.3 points a month earlier. According to ZEW President Achim Wambach, the positive trend in expectations likely continued to build because of strong quarterly results and elevated export levels.
A separate ZEW gauge of the current economic situation improved to -61.1 points from -77.6 in July, also beating expectations. The findings draw on responses from 185 analysts and institutional investors surveyed between August 10 and 17.
Rhine water levels threaten output
Wambach said the economy has benefited from federal government spending on infrastructure. However, he warned that record low water levels on the Rhine River remain a risk to economic activity. German chemical producers, utilities, steelmakers and agricultural traders have warned of higher costs and curbed production as a result of the low levels.
ECB rate-hike bets firm up
Ulrich Wortberg, an economist at Helaba Research, said the survey reflected a continued recovery in sentiment and that the figures tend to support expectations of an interest rate rise by the European Central Bank.
Higher oil and natural gas prices tied to the war in Iran have slowed a long-awaited recovery in Germany, and the country's economy ministry cut its growth forecasts for 2026 and 2027 in April. But the ministry said last week that positive momentum was emerging, with overseas buyers placing orders with energy-intensive manufacturers in Germany, which gained an edge as Asian rivals were hit even harder by costs linked to the Middle East war.
Source: Reuters via Investing.com
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