German economic confidence rebounds strongly ahead of weekend elections

The ZEW Indicator of Economic Sentiment for Germany surged 15.7 points from the previous month, reaching a seven-month high of 26.0 points in February.

The figure exceeded the market expectation of 19.9 points and highlighted rising optimism among financial market experts.

The clear improvement in economic expectations shortly before Sunday’s elections likely reflects hopes for a new, action-oriented government, said Achim Wambach, the center’s head.

Private consumption is expected to pick up over the next six months following a period of weak demand, he said.

"And the recent move by the European Central Bank to cut interest rates in response to sluggish economic activity in the Monetary Union is likely to have contributed to the better outlook for the construction industry," he added.

The assessment of Germany’s current economic situation showed modest progress, with the indicator rising 1.9 points to minus 88.5 points.

For the euro area, sentiment around economic development mirrored Germany's optimism.

The ZEW indicator for the eurozone rose 6.2 points to 24.2 points in February. The assessment of the eurozone’s current economic situation jumped 8.5 points, reaching minus 45.3 points.