German Economic Sentiment At 7-Month High

German economic sentiment improved to its highest level in seven months in January, as expectations were boosted by a strong run of positive data towards the end of last year.

The ZEW Indicator of Economic Sentiment for Germany rose to 16.6 from 13.8 in December, the Mannheim-based Centre for European Economic Research/ZEW said Tuesday. However, economists had forecast a score of 18.4.

The latest reading was the highest since June, when it was 19.2.

The current conditions index of the survey climbed to 77.3 from 63.5 in the previous month. This score was above economists' consensus for 65.

The reading was the highest since July 2011, when it was 90.6.

"The slight increase of the ZEW Indicator of Economic Sentiment is mainly due the improved economic situation across European countries, ZEW President Achim Wambach said.

The fairly good preliminary figures recorded for the development of the German GDP last year, as well as for the industrial production of the eurozone in November 2016, came as a surprise to many, the ZEW chief noted.

"This improvement in expectations can thus also be seen as a leap of faith for 2017," Wambach added.

The German economy expanded at the fastest in five years in 2016 on robust domestic demand amid weak trade. Gross domestic product grew 1.9 percent.

In December, the Bundesbank raised the growth forecast for this year to 1.8 percent from 1.4 percent, citing a strong labor market and rising household incomes.

Latest statistics from Destatis revealed that industrial production grew for the second straight month in November. Output had climbed 0.4 percent. At the same time, exports had logged the fastest growth in more than four years in November.

The economic sentiment index for Eurozone added 5.1 points to reach 23.2 level, survey data showed today. The current conditions index rose 7.9 points to touch -0.4 in January.