German Economic Confidence Strongest Since 2015

German economic confidence strengthened to the highest since 2015 as financial market experts expect economic growth to improve in months ahead.

The ZEW Indicator of Economic Sentiment rose to 20.6 in May from 19.5 in April, survey data from the Mannheim-based Centre for European Economic Research/ZEW showed Tuesday.

This was the highest score since August 2015 but slightly below the expected level of 22.0.

The current conditions index climbed 3.8 points to 83.9 points in May, which was above the expected level of 82.0 and the highest since July 2011.

Taken together, the assessment of the current situation and the economic sentiment show a positive outlook for the German economic growth in the coming six months, ZEW said.

"The latest figures on the gross domestic product confirm that the German economy is in good shape," ZEW President Professor Achim Wambach, said.

"ZEW indicators have been pointing to this trend for some time. The prospects for the eurozone as a whole are gradually improving, further strengthening the economic environment for German exports," Wambach added.

Carsten Brzeski, an ING DiBa economist said the combination of a high current assessment component and still increasing expectations keeps the traffic light for the German economy on green.

The economic confidence index for the euro area rose notably by 8.8 points to 35.1 in May. At the same time, the indicator for the current economic situation advanced 6.8 points to 18.3 points.

According to flash estimate released Tuesday, the euro area economy expanded 0.5 percent sequentially in the first quarter, the same pace of growth as seen in the fourth quarter of 2016.

On a yearly basis, GDP growth slowed slightly to 1.7 percent from 1.8 percent in the fourth quarter. The sequential and annual rates matched preliminary flash estimate.