The storm had already claimed the lives of at least two people in China's Hainan and 16 people in the Philippines
The Mannheim-based ZEW economic think tank’s monthly poll of economic sentiment rose to 1.8 in November from -7.2 in October, hitting its highest level since August and way above a consensus forecast of -7.0.
Friday’s surprisingly strong result — which reinforced an increasingly stark contrast between the outlook for Europe’s dominant economy and the states on the single currency zone’s periphery — sent the euro higher against the dollar while German government bonds fell and German share prices.
“Germany has remained encouragingly resilient to the (euro zone) periphery’s woes for now,” said Jennifer McKeown from Capital Economics.
“The fact that the index is back in positive territory means that more investors expect conditions to improve in the next six months than worsen,” she added.
The figures, coming hours before euro zone finance ministers meet to seek a way out of an Irish debt crisis that has rattled the single currency area, back up recent data showing Germany’s recovery from last year’s recession stands on solid ground.
The index, based on a survey of 277 analysts and investors and conducted in the two weeks leading up to Nov 15, was likely unaffected by rising concerns over Irish sovereign debt, ZEW said, but was especially boosted by US developments.
“The fact that it picked in November, after it had fallen for six months in a row, probably reflects rising optimism after the Fed started a new round of quantitative easing,” said Aline Schuiling from ABN Amro.
“Moreover, sentiment probably was lifted by the recent flow of rather positive data for the U.S. economy and early signs that the global industrial sector regained some momentum in the fourth quarter.”
“The positive development of the German labour market has stimulated domestic demand,” the ZEW said in a statement.
“Growing optimism in other countries’ outlooks, has to do with the United States for example ... But there are also strong increases in economic sentiment in France and Italy,” an economist at the think tank, Michael Schroeder, said.
A separate gauge of current conditions rose to 81.5, its highest level since July 2007, after posting 72.6 in October. A reading of 75.0 had been forecast.
Germany suffered its biggest postwar recession in 2009 when the economy contracted by 4.7 percent. Driven by exports and helped by stronger-than-usual consumer sentiment, it has emerged from the slump — leaving many of its euro zone peers trailing.
Austerity measures to slash the deficit are squeezing economic activity in a number of European states.
But Germany’s economy is proving more resilient than others so far to budget cutbacks, a subdued global trade environment and a strong euro, leaving observers hopeful it will be able to maintain its traditional role as driver of euro zone growth.
Its growth slowed in the July-September period but its upswing remains on a broad and firm footing, pointing to solid, if unspectacular growth in coming quarters.
Gross domestic product grew by 0.7 percent in the third quarter, and is expected to expand by 3.4 percent this year and by 1.8 percent in 2011, according to government forecasts given last month.
The storm had already claimed the lives of at least two people in China's Hainan and 16 people in the Philippines
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