German economic confidence fell in February but assessment of the current economic situation still remains at a high level, the ZEW Center for European Economic Research said in its latest monthly survey.
The economic sentiment indicator for Germany dropped to 17.8 in February from 20.4 in the previous month, below the long-term average of 23.7 points. The indicator reflecting the assessment of the current economic situation in the country shed 2.9 points to 92.3.
"The latest survey results continue to show a positive outlook for the German economy. The assessment of the current economic situation is still on a very high level and the economy is expected to improve in the coming six months. Economic growth in Germany is substantially driven by the very good development of both the global economy and private consumption," said ZEW President Achim Wambach. "Inflation expectations for Germany and the eurozone have also started to increase," he added.
Economic sentiment regarding the eurozone was at 29.3 points, a decline of 2.5 points from the January reading, while the indicator for the bloc's current economic situation increased by 1.3 points to 57.7 points. The results indicate "fairly positive" sentiment for the euro area, the ZEW said.
About two-thirds of respondents surveyed expected the inflation rate in Germany and the eurozone to rise in the next six months, according to the research institute.