By Noreen Burke
Investing.com -- Investor sentiment towards the German economy unexpectedly rebounded in January, according to a key monthly confidence gauge, returning to positive territory for the first time since February 2022 when the war in Ukraine began.
The ZEW think-tank's forward-looking sentiment index for Europe's largest economy rebounded to 16.9 for the month, up from -23.3 in December. Economists had anticipated that the reading would come in at -15.
The more favorable situation on energy markets and the German government's energy price caps were major factors in the improvement, according to ZEW President Achim Wambach.
Improving export conditions for the German economy with China’s lifting of COVID restrictions have seen earnings expectations for export and energy-intensive sectors increase significantly.
Prospects for a continued decline in the inflation rate have “brightened expectations” for consumer related sectors, Wambach added.
An assessment of current conditions also improved but only slightly, rising to -58.6 from -61.4 a month earlier.