FS Stapleton Alliance reports German investor sentiment rises in anticipation of economy reopening.
The data also showed that the German economy had shrunk by 5.3% in 2020. Analysts at FS Stapleton Alliance say this contraction, which was much smaller than in many of Germanys eurozone peers, was minimized thanks to the governments strong financial response to the pandemic last year.
FS Stapleton Alliance analysts are confident that Germanys economy will be on track to make a strong recovery during the course of this year but cautioned that there are still challenges to overcome.
In November, the German government imposed the second lockdown. This saw the closure of restaurants, bars and hotels and was later expanded to include the closure of most shops and services. The harsher restrictions were extended till the 7th March, with German Chancellor Angela Merkel reluctant to reopen schools and businesses until the rate of infection was properly under control.
On Monday, the government signaled that it intended to gradually lift restrictions in the coming weeks. FS Stapleton Alliance analysts believe the reopening of the economy, combined with the rollout of the vaccine will bode well for Germanys economic outlook.
Although the economy is expected to contract by 1.5% in the first quarter of this year, German investor confidence remains surprisingly high.
In February, German investor confidence rose significantly on expectations that consumption would increase in the coming months as the economy reopens.
The ZEW economic institute revealed that in February, German investors economic sentiments had risen by almost 10 points from the month before.
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