Economic optimism greater than it has been for 16 years

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Summer sales: there are great expectations that the German economy will recover significantly by the end of the year

Bad situation, excellent mood: stock market professionals are again more optimistic about the outlook for the German economy. The barometer of their expectations for economic development in the next six months rose surprisingly in August to plus 71.5 points from 59.3 points in July and reached the highest level since the beginning of 2004, as the Mannheim Center for European Economic Research (ZEW) on Tuesday, citing its monthly survey of 178 analysts and investors. "The hope of a quick economic recovery has increased again," explained ZEW President Achim Wambach (52) , but added: "The assessment of the situation has improved only slowly so far."

The data was unexpectedly good. The euro rose against the dollar and the Dax, the leading share index, continued to gain. Because economists had only expected 58 points for August and thus the second decline in a row. "The signs of a strong economic recovery in summer are thus continuing to form," said Uwe Burkert, chief economist of the Landesbank Baden-Württemberg (LBBW). "But there is also a downer."

The questioned financial market experts assessed the current economic situation "still extremely gloomy". Contrary to expectations, this barometer even fell by 0.4 to minus 81.3 points. "The danger of an expectation bubble, triggered by massive fiscal and monetary policy impulses, which primarily stimulate the financial markets, is not off the table," warned Burkert.

Recovery potential in the third quarter - service providers on the rise

Helaba analyst Ralf Umlauf also reads "Economic recovery potential in the third quarter" from the ZEW data. Nevertheless, monetary and fiscal policy will probably remain expansionary for longer. ZEW boss Wambach emphasized that the experts assumed a broad recovery, especially in the domestic economic sectors. This affects service providers, telecommunications companies as well as consumption and trade. "However, the continuing very poor earnings expectations for the banking sector and insurers with a view to the coming six months give cause for caution."

Because of the Corona crisis, the German economy collapsed by 10.1 percent in the second quarter and thus at record speed. Experts expect noticeable growth again in the second half of the year. Nevertheless, according to an estimate by the EU Commission, economic output is likely to shrink by 6.3 percent in 2020 as a whole, and thus more strongly than ever in the post-war period.

la / reuters