German investor confidence unexpectedly rose in March, a key indicator released Tuesday showed, adding to hopes that Europe's biggest economy will be able to withstand the risks triggered by slackening global growth and resurgent inflation, DPA reported. Drawn up by the Mannheim-based Centre for European Economic Research, the ZEW index edged up by 7.5 points to minus 32 points this month from 39.5 points in February. Economists had forecast that the index would drop to minus 40 points in March with the strong euro and surging oil prices expected to hit German investor sentiment and compounding worries about the threats to global growth and corporate earnings posed by the US mortgage market crisis. "The optimism of the financial analysts is presumably based on the hope that the peak of the financial market crisis will be overcome in half a year and that business dynamics will not weaken more strongly than expected to date," said ZEW President Wolfgang Franz releasing the report. Oil prices jumped to a record of 108.20 dollars a barrel ahead of the release of the latest ZEW index with the euro edging back up towards its all-time high and trading over 1.54 dollars. But said the ZEW: "Considering the currently weak figures for economic growth in Germany the financial market experts expect growth dynamics to revive from September 2008 on. In particular, the experts are more optimistic for the growth of the US-economy in the next six months." The ZEW said those responding to its survey also expected the US dollar to gain ground against the euro in the coming months which should help to bolster Germany's key export machine. In addition with German unemployment expected to continue to fall and higher wage settlements expected this year the survey also pointed to expectations of a pickup in private consumption in the coming months. Based on a survey of about 290 analysts and institutional investors, the ZEW indicator, which gauges economic sentiment six months down the track, is considered to be a curtain-raiser for the release later this month of Germany's closely watched Ifo business confidence index. German business confidence unexpectedly rose for the second month in a row in February, the Munich-based Ifo economic institute said its monthly index of 7,000 German executives. Economists had also predicted that the index would slide. A raft of data has also pointed to the German economy managing to remain on a growth path this year despite the current global economic uncertainty. Data released Monday showed German exports rising by a bigger- than-forecast 3.8 per cent in January, with industrial production also rising more than predicted and corporate insolvencies dropping by 14.6 per cent in 2007.
