By Ed Frankl
Germany’s economic outlook improved unexpectedly in December, reflecting improving expectations for earlier interest rate cuts alongside declining inflation, according to a monthly survey published Tuesday.
The ZEW Indicator of Economic Sentiment, which tracks expectations over the next six months, rose 3.0 points on month to 12.8 in December.
That was better than expectations of the indicator to fall to 8.0, according to a consensus of economists polled by The Wall Street Journal.
The improvement comes despite a budgetary deadlock in Germany’s coalition government, ZEW President Achim Wambach said.
The share of respondents expecting European Central Bank interest-rate cuts in the medium term doubled compared with November, boosting sentiment, while there was also increased belief that inflation is set to fall further, Wambach added.
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