German investors grow in confidence

The ZEW survey in Germany has risen to a 12-month high.

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By :  ,  Financial Analyst

Investors in Germany are growing in confidence, according to the closely-watched ZEW survey.

The investor confidence index rose to 53 points, its highest level for the past 12 months. However, there is concern that ongoing issues in both Greece and Ukraine could hurt sentiment in the near future. After anti-austerity party Syriza took control in Greece there have been suggestions that the country could leave the eurozone.

A move of this ilk, combined with ongoing conflict in Ukraine between government forces and rebels in the east of the country, could damage investor confidence across the rest of the region. Germany's boost has been attributed to quantitative easing implemented by the European Central Bank and unexpected high economic growth.

Clemens Fuest, ZEW president, explained that Germany's economy grew strongly in the final quarter of 2014. An expansion of 0.7 per cent during the period has put it in a good position going forward into the coming year. However, despite the positive news surrounding ZEW survey, it was taken prior to Greece's failure to agree a deal with Europe on its bailout.

Mr Fuest said: "The intensification of the Ukraine crisis and the collision course of the new Greek government are dampening expectations."

Germany bounces back from near-recession

Germany's economy has performed well in recent months after narrowly avoiding falling into recession in November 2014. The nation's economy had shrunk by 0.1 per cent in the second quarter of the year but avoided a recession by recording a 0.1 per cent growth in the third. Germany's struggles cast a worrying shadow over the future of the eurozone.

There are still concerns about a possible Grexit over the coming months and all eyes will be on Greece to see whether or not the country will leave the eurozone.

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