Germany's economic morale grows to hit highest since March

ZEW indicator of economic sentiment rises to 12.8 points in December, as expectations for European Central Bank to cut rates strengthen

By Tuba Ongun

Germany's economic morale further improved in December, reaching its highest level since March, according to data released on Tuesday.

The indicator by the Leibniz Center for European Economic Research (ZEW) for Germany's economic sentiment rose to 12.8 in December, up 3 percentage points from month earlier.

An index of current conditions in Germany slightly increased by 2.7 points to minus 77.1 points.

ZEW head Achim Wambach pointed out the slight improvement in the two readings despite the current budget crisis, saying: "This is due to the fact that the share of respondents expecting interest rate cuts by the European Central Bank in the medium term has doubled."

He added that more financial market experts expect inflation rates fall further.

The ZEW indicator of economic sentiment for eurozone climbed 9.2 points from the prior month to 23 in December.

The situation indicator for the eurozone, on the other hand, decreased marginally by 0.9 points to minus 62.7 points.

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