German investor sentiment hits five-month high

16th Dec 2025 10:36

(Sharecast News) - Investor sentiment in Germany hit a five-month high in December, according to the Centre for European Economic Research (otherwise known as ZEW), with signs of an economic recovery picking up.

The ZEW's headline Indicator of Economic Sentiment, which surveys analysts and institutional investors about their expectations for the German economy, rose to 45.8 this month, up 7.3 points from November and the highest reading since July.

However, the assessment of the current economic situation fell by 2.3 points to -81.0.

In terms of sectors, notable increases were seen in the auto industry, where the expectations indicator rose 7.7 to -22.0, along with other export-oriented sectors like chemicals, pharmaceuticals and metals, which also saw improvements.

The financial sectors also reported solid increases in sentiment, with the indicator for banking rising 14.9 points to 30.6 and for insurance up 11.4 at 28.3.

"Expectations have become more positive. After three years of economic stagnation, chances for a recovery of the economy are good and this is reflected in the sentiment," said Achim Wambach, ZEW president.

"The expansive fiscal policy will provide new momentum to the German economy. However, the recovery remains fragile. Measures for dealing with persistent trade conflicts, geopolitical tensions and the absence of investments are likely to figure on the reform agenda for 2026 as well."

Investors' expectations for the wider eurozone rose 8.7 to 33.7, while the current assessment sub-index also fell, down 1.2 at -28.5.