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Tuesday, February 12, 2008

ZEW Economic Sentiment Index February 2008

Investor confidence in Germany rebounded slightly in February, perhaps because expectations on tax rebates and the impact of recent interest-rate cuts in the U.S. suggest that demand for German exports may withstand the downturn. The ZEW Center for European Economic Research said its index of investor and analyst expectations for the next six months rose to minus 39.5 from the 15-year low of minus 41.6 last month.

This being said, the rebound was only very slight, and since the situation in Germany is far from disastrous at the present time, it is hard to see why analysts expected the reading to continue going down when it was already at a 15 year low.

Again, whether or not exports will hold up in the coming months is still a very much open question, since year on year rates of increase have been - as reported in this post - almost in "freefall" recently, and once annual increases in exports fall to zero then its normally recession time in Germany's export dependent economy.

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