Optimism is growing in the German economy: key business indicator at a three-year high

Germany's key business indicator, the index of investors' and analysts' expectations for the economy over the next six months, has improved for the third month in a row. This was reported to by the ZEW Research Institute on Tuesday, July 15.

The indicator rose from -14 points in April to +52.7 points in July, the highest value since the "pre-war" February 2022 and indicating growing optimism in the economy.

"After a significant improvement in the situation over the past two months, positive sentiment among respondents has strengthened. Despite the uncertainty associated with global trade conflicts, almost two-thirds of experts expect the German economy to improve. The hope for a quick resolution of the US-EU customs dispute as well as potential economic stimulus from the planned federal immediate investment program dominate the sentiment picture," ZEW President Achim Wambach commented on the survey results, as quoted in a press release.

A particularly noticeable improvement in sentiment was recorded in machine building and metallurgy, as well as the electrical industry.

At the same time, the index of investors' and analysts' attitudes toward the current situation in the German economy, although improved by almost 13 points, remains deeply negative at -59.5 points.

The last time it was positive was in November 2021.

• Germany is experiencing the longest period of economic stagnation since World War II. GDP has barely grown since 2019 .
• The recovery of the German economy is critical for the EU. As Europe's largest economy, Germany has been a drag on the eurozone due to its stagnation. Its revival is spurring growth across Europe.