Germany's economic morale improves further in May

By Tuba Ongun

Germany's economic morale this month improved further led by signs of economic recovery, according to data released on Tuesday.

The ZEW Indicator of Economic Sentiment for Germany this month gained 4.2 points from a month earlier to 47.1 in May, the highest since February 2022.

The sub-index for current economic situation in Germany also improved to minus 72.3 in May, up 6.9 from April.

The stronger-than-expected growth of the German economy in the first quarter of 2024, helped both the assessment of the current situation and economic expectations to become more favorable, ZEW President Achim Wambach said.

The gross domestic product (GDP) rose by 0.2% in the first quarter of 2024 compared with the fourth quarter of 2023, according to the latest data from Destatis.

"Signs of an economic recovery are growing, bolstered by better assessments of the overall eurozone and of China as a key export market. The increased optimism is reflected in particular in the sharp rise in expectations for domestic consumption, followed by the construction and machinery sectors," Wambach noted.

The ZEW indicator of economic sentiment for the euro area increased 3.1 points to 47 this month.