Hope on the horizon for germany?

German investor confidence unexpectedly jumped in February, according to research firm Zew Institute...

Its Zew index rose to -5.8 points, from -31.0 in January. Analysts had forecast a more modest rise to -25 points. It is the fourth monthly increase in a row, and the index is now at its highest level since July 2007.

Although the assessment of the current situation worsened, dropping to -86.2 from -77.1 in January, investors felt the bottom was in sight, said Zew.

"By the middle of 2009, the economy is likely to improve again. A sign of hope - no more, no less," commented Zew president Wolfgang Franz.

'Silver lining'

Zew also said the sharp improvement might be explained by the fiscal and monetary policy measures launched by the German government and the European Central Bank to stimulate the economy.

However, Carsten Brzeski from ING Financial Markets, warned that growth will remain negative in the first quarter.

"First, hard data will bring more bad news as global demand for German products is weak and the German industry will only slowly return to full speed," he said.

"Still, the gathering clouds have a silver lining."

Source: www.bbc.co.uk