German ZEW Confidence Rises Less Than Forecast on Uncertainty

  • Expectations index climbs to 12.8 from 10.4; est. 13.0
  • ZEW says no clear conclusions can be drawn for German economy

German investor confidence rose less than anticipated in March as political uncertainty weighed on the outlook of Europe’s largest economy.

The ZEW Center for European Economic Research in Mannheim said on Tuesday that its index of investor and analyst expectations, which aims to predict economic developments six months ahead, climbed to 12.8 from 10.4 in February. Economists in a Bloomberg survey predicted an increase to 13.0.

The data come one day before the Netherlands kicks of a series of elections in the 19-nation euro region that risks to see increased support for populist, euro-skeptical parties. While the Bundesbank predicted last month that German growth would pick up at the start of 2017, a slump in factory orders in January highlighted the risks to the outlook.

The fact that confidence “only shows a slight upward movement is a reflection of the current uncertainty surrounding future economic development,” ZEW President Achim Wambach said in a statement. “With regard to the economic situation in Germany, no clear conclusion can be drawn from the most recent economic signals.”

ZEW’s gauge for current conditions rose to 77.3 in March from 76.4. A measure for expectations in the euro area advanced to 25.6 from 17.1.

Earlier on Tuesday, the Federal Statistics Office confirmed that German inflation accelerated to 2.2 percent last month, the highest level since 2012.