FX.co ★ German Investor Sentiment Rebounds Sharply in May

The ZEW Indicator of Economic Sentiment for Germany experienced a significant rise of 39.2 points, reaching 25.2 in May 2025. This marks a robust recovery from April's near two-year low of -14.0 and exceeds market forecasts of 11.9. The survey reflects heightened optimism for the upcoming six months, fueled by the establishment of a new federal government, advancements in resolving tariff conflicts, and early signs of inflation stability. In May, almost all sectors noted an improvement in sentiment. The banking sector, along with export-driven industries such as automotive, chemicals, metals, machinery, and steel, showed particularly positive prospects. The European Central Bank's recent interest rate reduction, along with anticipated future measures, is predicted to notably support a resurgence in the construction sector. Respondents also foresee a revival in domestic demand, which has been tepid in recent months. At the same time, Germany's current economic assessment remained low, slightly declining by 0.8 points to -82.0.