(MENAFN– ecpulse) German investor confidence halted its advance in January after rising for five straight month in December, hitting the highest level in more than seven years.
The index of investor and analyst expectations retreated to 61.7 in December from 62.0 in November, lower than median estimate of 64.0, the ZEW Center for European Economic Research in Mannheim said on Tuesday.
The current situation gauge rose to 41.2, highest mark since May 2012, from a prior 32.4, compared to forecast of 35.0.
"For months, the surveyed financial market experts have expected an economic upswing. In this month’s survey the clearly improved assessment of the current economic situation seems to confirm these expectations," says ZEW-President Prof. Dr. Clemens Fuest.
Business confidence climbed to the highest in 20 months in December, as recovery started to gather momentum.
But today’s report gives a sign of caution about the pace of progress with the beginning of the new year.
The Bundesbank expects growth to rise “strongly” in the coming months despite the slow start of the last quarter.
Europe’s biggest economy will expand 1.7% in 2014, up from its prior estimate of 1.5%, the Bundesbank said in its semiannual forecast released earlier in December.
German growth pace eased in the quarter through September to 0.3 percent from 0.7 percent in the previous quarter, where an expansion of 0.25 percent is predicted in the last quarter of 2013.
The manufacturing sector in Germany probably expanded further in January to 54.7 versus 54.3 while the services gauge rose to 54.0 from 53.5, a report sue this week may show.
In the euro area, however, ZEW survey (expectations) surged to a record high of 73.3 from 68.3.
Meanwhile, there is more confidence the 18-nation region would continue a gradual recovery this year.
The European Central Bank kept its benchmark interest rate at its record low of 0.25 percent this month, where it foresees a contraction of 0.4 percent this year followed by an expansion of 1.1 percent in 2014.
As of 10:10 GMT, the euro traded lower around 1.3530 versus U.S. dollar after hitting a low of 1.3524.
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