A leading confidence index in Germany published this morning rose in January for the first time in seven months to offer some hope for the country's troubled economy.
The ZEW economic research institute's economic expectations index, based on a poll of 323 analysts and institutional investors, rose by 13.4 points to plus-14 points in January, ZEW said.
It was the first time since June 2002 that the index has risen and was a much better reading than most analysts had been expecting, with forecasts ranging from a renewed fall in the barometer to a slight gain.
"It's the first glimmer of hope on the horizon," said ZEW President Mr Wolfgang Franz. But he warned: "There are of course still substantial risks, such as the outcome of the Iraq crisis and German economic policy".
Feeding the improved sentiment was the expectation that oil prices would fall in the medium term. The stabilisation on the world's stock markets was also having a positive effect, Mr Franz said.
ZEW also calculates an index for the euro zone as a whole, which pointed to brighter prospects for the single currency area, with the area-wide index rising by 2.8 points to 29.9 points in January.
The ZEW indicator represents the balance between positive and negative expectations for the economy over the next six months.
PA