Investor confidence in Germany was up in February, according to a leading index of investor and analyst expectations.

The ZEW Indicator of Economic Sentiment for Germany increased by 25.2 points and now stands at minus 5.8 points after being minus 31.0 points the previous month. This is the fourth monthly rise in a row and is reported to be better than most expectations.

The index measures sentiment six months ahead, and so indicates that those surveyed feel increasingly confident about the fiscal measures unleashed in Europe's biggest economy. Falling consumer prices and the declining cost of fuel have also caused increased confidence that private consumption will pick up.

"Currently, the German economy is still on a downward move," said ZEW President Wolfgang Franz. "However, the experts expect this movement to reach its lowest point within the next months. By the mid of 2009, the economy is likely to improve again. A sign of hope - no more, no less."

The health of the German economy, which is currently in recession, is vital to many CEE economies for whom it is a main trading partner.

Robin Bowman